While the problem of access to credit is far from being fully resolved given the deficiencies in the country’s financial and lending infrastructure, a major step forward towards its resolution was achieved through the SULONG Program launched in the early years of the Arroyo administration by the Department of Trade and Industry (DTI).

The SULONG, acronym for the SME Unified Lending Opportunities for National Growth, is a collaboration of seven government financial institutions (GFI) namely: the Development Bank of the Philippines, Land Bank of the Philippines, National Livelihood Development Corporation (formerly National Livelihood Support Fund), Philippine Export-Import Credit Agency, Quedan Rural Credit and Guarantee Corporation, Social Security System, and the Small Business Corporation (also known as the Small Business Guarantee and Finance Corporation). Its creation was geared towards providing access to finance to SMEs through a standardized and uniform lending approach by the participating GFIs, with the end goal of promoting SMEs as globally competitive and a viable business sector.

It is through the SULONG program that the government was able to extend some P187 billion loans to SMEs all over the country from 2004 up to the end of 2009, a milestone that is quite difficult, if not impossible to reach without the support from various implementing agencies and stakeholders both from the public and private sectors.

The seed for the SULONG initiative came from former DTI Secretary Mar Roxas who made sure the GFI heads come together for this pioneering collaboration. Subsequent DTI secretaries sustained the effort, from Sec. Cesar Purisima to Sec. Johnny Santos.

Special mention must be given to former DTI Secretary Peter B. Favila who has recently been appointed to the BSP Monetary Board, for his support to the SULONG Program for the last five years. It is under Secretary Favila’s leadership that the long-awaited amendments to the Magna Carta for SMEs was achieved, which is hoped to lead to more concrete changes in the present condition of SMEs. And in his position at the Monetary Board, we have an SME Champion we can lean on.

The SULONG Program has brought many small businesses to their success which in effect created positive impact to our national economy. It has not only provided opportunities for the creative minds of our own entrepreneurs, but has also boosted the economy through the provision of jobs for the Filipinos in various industries.

SULONG has been actively participating in various activities advocating for SME promotion and development. This includes, among others, educational talks related to SME finance, trade fairs, and forum organized by various institutions. The GFIs have also partnered with various institutions and groups in undertaking projects for SMEs. And for those who may not know, the GFIs have formed a SULONG Finance Committee to serve as a venue for the exchange of ideas that would lead to the enhancement of the program and to the attainment of a better lending environment for the SME sector. The Committee meets on a regular basis to discuss issues related to SME finance and to find ways to address them. The fact that the GFIs are finding a common platform to address SME finance problem is, by itself, a major step forward.

While much has been achieved, SULONG has its flaws and imperfections that can still be enhanced. As the lead convener of the SULONG Finance Committee, we have witnessed challenges in the realization of its goals, something that is shared by the rest of the participating GFIs. At this stage, the SULONG partners have agreed to produce a policy paper that will tackle our experiences, both successes and difficulties, individually and as a body.

Hopefully, with the GFIs’ assessment of their experiences with the program implementation, whether good or bad, our future leaders will have a grasp of what has already been done and the options for further growth. The SULONG initiative should serve as a jump-off stage for a more robust GFI collaboration for SMEs, leading to a more developed, globally competitive SME sector. Whoever wins the national elections should build on this initiative. We wish the new leadership will be mature enough not to discard programs of the past just because they are of another administration.
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(Mr. Benel P. Lagua is the President/COO of the Small Business Corporation. He is likewise an active member of FINEX. Feedback and comments are welcome at benellagua@alumni.ksg.harvard.edu ).