New law to boost MSMEs, financial inclusion

MANILA, Philippines — The law signed by President Duterte allowing movable assets to become eligible collateral for loans is expected to unleash significant economic opportunities for the country’s micro, small, and medium enterprises (MSMEs).

Bangko Sentral ng Pilipinas Deputy Governor Chuchi Fonacier said the signing of Republic Act 11057 or the Personal Property Security Act is one of the significant milestones for more inclusive economic growth.

“The BSP strongly supports game-changing reforms in the area of credit access and shall continue to provide an enabling regulatory environment for businesses, especially MSMEs, to flourish,” Fonacier said.

The law enables access to credit as it allows movable assets to become eligible collateral for purposes of loan applications, addressing the lack of real property of many MSMEs. Examples of movable assets are machineries, accounts receivables and inventories.

Immediate operationalization of the law is necessary to unlock concrete benefits for MSMEs. MSMEs account for about 66 percent of total jobs in the country and for 99.6 percent of all DTI-registered businesses.

To achieve this, the 6th Financial Infrastructure Development Network (FIDN) Conference is set to push for next steps to concretize the benefits of the law signed by the country’s chief executive last August

The conference, scheduled to kick off today at the Philippine International Convention Center (PICC), gathers government policymakers, development partners led by the International Finance Corporation (IFC), a member of the World Bank Group, and private sector representatives to discuss important next steps, issues and strategies for the law’s effective implementation.

Finance Secretary Carlos Dominguez III said the law is in keeping with the Duterte administration’s goal of sustaining the country’s growth momentum and achieving financial inclusion for all.

Dominguez said the law bears huge potential to accelerate the growth of MSMEs.

“Its effective implementation will mark a big leap to sustainable, robust, and a truly inclusive economic growth. It will help the Duterte administration grow the middle class, ensure financial inclusion, and transform the country into an upper middle-income economy by 2022,” the head of the Department of Finance said.

Securities and Exchange Commission chair Emilio Benito Aquino said cooperation and collaboration with other government agencies and partners from the private sector are necessary for truly inclusive economic growth.