Gov’t moves to make financing more inclusive – NEDA

MANILA, Philippines — Government interventions are being set in place to make financing more inclusive in a bid to address the country’s trade finance gaps, the National Economic and Development Authority (NEDA) said.

“We need to boost financial services to help our small and medium enterprises. More importantly, such services will establish an inclusive financial sector,” Socioeconomic Planning Secretary and NEDA chief Ernesto Pernia said at the sidelines of the 2018 Annual Meeetings of the International Monetary Fund-World Bank Group (IMF-WB).

He said Republic Act 11057 or the Personal Property Security Act, among such government initiatives, strengthens the legal framework for the use of personal property as collateral, and establishes a modern, centralized online collateral registry.

The Personal Property Security Act was signed into law last Aug. 17.

“We expect this to make financing more accessible to Filipino SMEs, including export-oriented firms,” he said.

“The Bangko Sentral ng Pilipinas is also strengthening retail payments systems by adopting the National Retail Payments Systems framework, or NRPS. This should facilitate more convenient, affordable and secure electronic fund transfers and payments,” Pernia added.

In addition, Pernia said the government is increasing credit guarantees from P10 billion to P50 billion for SME exporters through the Philippine Export-Import Credit Agency (PhilEXIM), an attached agency of the Department of Finance.

PhilEXIM provides guarantees to facilitate foreign loans of export-oriented industries, public utilities, and those registered with the Board of Investments.

Pernia said the Philippine Development Plan 2017-2022 also identifies the need for a resilient and inclusive financial sector. It lays down strategies such as strengthening the effectiveness of financial inclusion initiatives, encouraging efficiency and innovation in microfinance and microinsurance, and developing the legal infrastructure for Islamic finance, among others.

Apart from addressing the country’s trade finance gaps, the NEDA said the government interventions would make financing more inclusive is also part of the Philippines’ efforts to narrow the global trade finance gap, which stands at around $1.5 trillion every year.