$40M worth of loans for microfinancing OKd

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Michelle V. Remo

$40M worth of loans for microfinancing OKd

Posted: 12:07 PM Jan. 02, 2006Inquirer
Published on Page B8 of the January 2, 2006 issue of the Philippine Daily Inquirer

THE BANGKO SENTRAL NG PILIPINAS HAS approved the government's plan to take out up to $40 million worth of foreign loans to fund microfinance programs in the rural areas and infrastructure projects in Mindanao.

BSP Governor Amando M. Tetangco Jr. said the Monetary Board, the BSP's policy-making body, approved last week an $18.63-million loan intended to support microenterprises in the provinces.

The loan will come from the International Fund for Agricultural Development, and will be used to provide credit to microenterprises in rural areas. The loan was intended to complement the Arroyo administration's agenda of generating more jobs including those generated by micro-businesses.

The loan proceeds will be given to the Small Business Guarantee and Finance Corp. (SBGFC), an attached agency of the Department of Finance tasked with providing credit access to micro, small and medium enterprises.

Tetangco said the credit facility to be created by the loan would be made available to microenterprises in places like the Cordillera region, Sorsogon, Cotabato, Sarangani, General Santos, Caraga, Bicol and Eastern Visayas.

The central bank chief said the loan will have a 40-year maturity and will be interest-free. It will, however, carry a yearly service charge of 0.75 percent, he added.

The Monetary Board likewise approved the undertaking of a $20-million loan extended by the Saudi government to the Philippines to help finance infrastructure development projects in Mindanao, particularly in Cotabato and Lanao provinces.

Tetangco said this loan would carry a 25-year maturity and an interest of 2 percent per year.
Aside from the estimated $40 million loan already approved by the Monetary Board, another $25 million worth of credit will be formally approved by the central bank's policy-making body.
Tetangco said members of the Monetary Board had already approved in principle the undertaking of a $25-million loan from the Sumitomo-Mitsui Banking Corp. to facilitate the regular importation by the National Food Authority (NFA).

He said the NFA loan would be used to pay for rice importation made in 2005 and additional importation this year.

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