Business leaders blame BSP for slow pace of MSME dev’t

MANILA, Philippines - Bangko Sentral ng Pilipinas (BSP) regulations may have impeded the growth of micro, small, and medium enterprises (MSMEs) in the country, according to a business leader.

“The single biggest factor why our SMEs have not moved is BSP, because of the regulations of the BSP. We are always ahead of all prudential regulations to the point that the MSMEs are the most underbanked sector in the region,” Philippine Chamber of Commerce and Industry (PCCI) honorary chairman Sergio Ortiz-Luis said.

“Why are we the only one who has not succeeded in bringing up the financing power of MSMEs? Until now we’re talking about it and the other countries are doing it. You cannot apply the rules of the commercial bank of the central bank on SMEs, especially for the micro because if you do, you’re basically telling them you are unbankable,” Ortiz-Luis said.

The business leader said the PCCI and the Philippine Exporters Confederation Inc. in which he serves as president are pushing for the amendments in the implementing rules and regulation of the magna carta for MSMEs.

Among the amendments being proposed by the business groups is the removal of the provision in the law which says that SB Corp. should be administered and supervised by the central bank.

SB Corp. is designated as the primary agency providing financial assistance to MSMEs.

“(BSP Deputy Governor Nestor) Espenilla has agreed to me on this, that we can take that away from the law. They will allow SB Corp. to formulate their own lending rules and it will not be supervised by the BSP,” Ortiz-Luis said.

Ortiz-Luis said his groups are likewise pushing for the government to allot 20 percent of the conditional cash transfer (CCT) budget for the MSMEs.

“In CCT you give away the money. Here, you will loan it with no collateral and you may be able to collect 70 to 75 percent. So which is better, give away the money or loan it?” he said.

According to Ortiz-Luis, the government’s recently launched Pondo sa Pagbabago at Pagasenso Program (P3) which is a micro-financing program for small entrepreneurs aimed at helping eradicate poverty and promote business and employment among Filipinos, will be able help the local MSMEs but “it will not scratch the surface.”

The P3 funding program provides microenterprises an alternative source of financing that is easy to access at reasonable rates. Loan amounts to small-borrowers will be in the range of P5,000 to P100,000, at a maximum interest rate of 2.5 percent per month, with no collateral requirement

“It’s the rules that will determine whether our MSMEs can take off. If the rules are the same, then we’re just kidding each other,” he said.