By Ben Rosario Speaker Alan Peter Cayetano has called on state-owned and private banks to make loans more easily accessible to millions of micro, small and medium enterprises (MSMEs) and farmers adversely affected by the economic crisis triggered by the coronavirus disease (COVID-19) pandemic. House Speaker Alan Peter Cayetano
(RTVM / MANILA BULLETIN) Cayetano aired the suggestion during the virtual hearing of the House of Representatives Defeat Covid 19 Committee presided over by Majority Leader Martin Romualdez on Tuesday. “The purpose is to help people but at the same time keep the financial institutions healthy,” said the House leader. He noted that the financial system’s problem is how to get potential small borrowers avail themselves of loans from the banking sector. “How do we get people not to borrow from 5/6 lenders who charge very high interest rates and go to you?” the Taguig-Pateros solon said. In attendance during the on-line meeting were Finance Secretary Carlos Dominguez, Gov. Benjamin Diokno of the Bangko Sentral ng Pilipinas (BSP), Land Bank president Cecilia Borromeo, and Government Service Insurance System General Manager Rolando Macasaet, who acted as the resource persons. Cayetano said small borrowers “are intimidated by the formal banking system” and usually resort to available financial sources that impose stiff interests. “Even farmers with land titles who apply for small loans are told the application/approval process is very tedious. They are being dissuaded,” he said. The House leader urged Dominguez, Diokno, Borromeo, and Macasaet to simplify and shorten such process and to reduce documentary requirements “But of course, without affecting your financial institutions. We do understand that,” Cayetano said. Responding to the appeal, Borromeo, whose primary mandate is to lend to farmers, market vendors and other small borrowers, said: "Yes, we can strike a good balance of maintaining prudence and the other due diligence processes that we need to undertake before we lend out precious government funds.” “We did it in the case of the P15,000-loan to farmers, We trimmed down the requirements and shortened the process. One key success factor was that we had a list of beneficiaries identified by THE Department of Agriculture. So, we can do it in the case of small and medium-sized enterprises. We will continue to look for solutions,” she said. Diokno said the BSP has eased the requirement for banks to set aside a portion of their funds as reserves. “We have freed up P180 billion to P200 billion and we asked banks to lend the money to MSMEs,” he said. Dominguez said the government, through the Philippine Export and Foreign Loan Guarantee Corp., will guarantee a large portion of the loans banks extend to MSMEs to boost lending to small borrowers. Macasaet said the GSIS is offering loans of up to P500,000 to its members payable over six years at an annual interest rate of six percent. “We have already released over P100 billion to 250,000 members,” he said.