THE Department of Finance (DoF) said the many demands on the government’s resources during the pandemic are forcing it to weigh the need to maintain a solid sovereign credit rating while also aiding hard-pressed small businesses.
Assistant Secretary Antonio G. Lambino II said a solid sovereign credit rating will eventually benefit micro-, small, and medium-sized enterprises (MSMEs) by gving them access to cheap credit.
“Sa madaling salita, gusto po talaga nating tulungan ‘yung access to credit ‘nung ating mga MSMEs (We can also aid MSMEs via access to credit) and that is why we have to balance all of these things — from subsidies to credit rating, the things that we fund in addition to subsidies,” Mr. Lambino said in an online forum organized by the Department of Trade and Industry (DTI) Tuesday.
“If our credit rating is good and the policy rate is managed well, ‘yung interest rate po, magtrickle down po to the borrowers (the benefit from low interest rates will trickle down to the borrowers),” he added.
Last week, Moody’s Investors Service maintained its Baa2 rating for the Philippines, a notch above the minimum investment grade, noting that the country’s strong fiscal position built up in recent years will help it weather the coronavirus crisis. It likewise maintained its “stable” outlook, which indicates no change to its evaluation over the next six months to two years.
Bangko Sentral ng Pilipinas (BSP) Managing Director of the Center for Learning and Inclusion Advocacy Pia Bernadette R. Tayag said banks continue to struggle with understanding the needs of MSMEs because their operations are geared towards servicing larger clients.
“Gusto namin magka-kapasidad ang mga bangko na intindihin ang buong value chain para maintindihan nila na itong mga players na ito, itong mga small farmer, meron siyang ginagawa para sa mas malaking chain, kumbaga para mas maging panatag ang loob ng mga bangko na magpautang (We want banks to develop the capacity to understand the entire value chain, like small farmers, who are doing something for a bigger chain. This will help banks to be more at ease in extending credit to them),” she said.
Ms. Tayag said the bank is developing a uniform MSME loan application form for banks and financial technology firms to standardize the credit process and help MSMEs become familiar with the requirements for obtaining loans.
Ms. Tayag added that the BSP is working on a credit risk database from bank data on MSME financial statements to improve credit profiling of small businesses. — Luz Wendy T. Noble