In an effort to help micro, small and medium enterprise (MSME) exporters, who are in need of emergency loans, recover from the economic impact brought by the COVID-19 pandemic, the Department of Trade and Industry-Export Marketing Bureau (DTI-EMB) conducted a webinar on bank financing options last 24 September 2020.
The webinar was under DTI-EMB’s Philippine Export Competitiveness Program (PECP) that aims to boost exporter competitiveness through information sessions, seminars, and the like. Resource speakers from the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) discussed their respective credit assistance programs tailored for micro, small, and medium enterprises (MSMEs) in need of bank credit.
Assistant Vice President and Head of LBP’s Program Management Department Gene David discussed the bank’s Interim Rehabilitation Support to Cushion Unfavorably-affected Enterprises by COVID-19 or I-RESCUE program. As a support program for SMEs, cooperatives, and microfinance institutions (MFIs), I-RESCUE offers credit assistance through loan restructuring under more flexible terms and conditions.
As a lending program, it facilitates the rehabilitation of SMEs, co-ops, and MFIs by providing a loan tenor of up to five years with a maximum of two years’ grace period on the principal payment depending on cash flow. The loanable amount can reach up to 85% of actual needs, provided that the total loan exposure, including existing loans, shall be within repayment capacity of the borrower as per LBP’s computation.
David also discussed LBP’s SME Credit Facility targeted for exporters, the Exporters Production Support Facilities. This credit facility provides export packing credit lines through the financing of pre-shipment working capital requirements for the procurement of materials and labor to manufacture goods for export. It also offers export bills purchase line through the financing of post-shipment working capital requirement and liquidity support for exporters, before clearing of bank drafts or notes.
On the other hand, DBP Vice President for Program Development and Management Department Noli Cruz introduced the Bank’s credit assistance program called Rehabilitation Support Program on Severe Events or RESPONSE.
Eligible private sector borrowers such as MSMEs can avail of loans for their capital expenditure projects for a tenor of up to 10 years, inclusive of three years’ grace period; and working capital for a tenor of up to five years, with one-year grace period. Fees and other charges are also waived and interest rates are fixed for five years based on Bloomberg Valuation (BVAL) plus 1% spread.
As a credit program, RESPONSE is part of DBP’s strategy to support “entrepinoys” and contribute to the government’s economic recovery efforts, focusing on infrastructure, health, and the food value chain, i.e. agriculture, logistics, and food manufacturing and trade.
The PECP is a monthly seminar series for export stakeholders. For more information, contact the Secretariat at PECP@dti.gov.ph.
Links:
Landbank I-RESCUE:
https://www.landbank.com/i-rescue-lending-program
Landbank Exporters Production Support Facilities: https://landbank.com/loans/business-loan/for-sme-and-microfinance/exporters-production-support-facilities
