BSP to ‘pull out all stops’ to help Covid-hit local MSMEs

BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said they are looking at implementing more measures to aid local micro, small and medium enterprises (MSMEs) in their recovery after being badly hit by the pandemic.

Speaking at the virtual launch of the Citi Microentrepreneurship Awards (CMA) 2020, Diokno said more than ever, it is vital to sustain local microentrepreneurs who provide essential products and services in the “last mile.”

“Predominant in low-income areas and serving as engines driving local economies, microentrepreneurs also nurture swathes of the Filipino population depending on them for post-pandemic recovery and rebuilding,” Diokno said.

“Hence, the BSP is pulling out all the stops to support micro entrepreneurs and SMEs,” he added.

MSMEs account for 99.5 percent of local business enterprises, 62.4 percent of total employment in the country, and 35.7 percent of gross value added (GVA).

Diokno said they are looking to implement more projects in the pipeline to help facilitate MSMEs’ access to financing and to further understand their behavior and needs.

According to the BSP chief, among the BSP’s hallmark MSME projects include the ongoing building of a Credit Risk Database (CRD), which uses a variety of data to build statistical scoring models to sharpen credit assessment of banks and promote risk-based SME lending.

The governor also said they are developing a standard loan application form (SLAF) for small business loans to address sector preference for simplified and streamlined loan application requirements.

To further understand MSMEs’ needs, Diokno said the BSP partnered with stakeholders for the upcoming study to inform strategic interventions toward  developing a supply chain finance (SCF) market in the country.

Earlier this year, the BSP decided to include new loans granted to MSMEs as part of industry compliance with reserve requirements to stimulate lending to the sector. The country’s monetary authority also reduced the credit risk weight of current loans granted to MSMEs and assigned zero percent risk weights for loans covered by government guarantee programs.

FSP fees waived

Diokno has also encouraged financial service providers (FSPs) to waive fees for PESONet and InstaPay transactions to broaden usage of digital payment streams and make digital payments available for all enterprises, big or small.

The governor also lauded Citibank’s efforts to continue with the annual CMA awards amid the pandemic.

“This year is a landmark for the CMA program, for being launched amid the Covid-19 pandemic and showcasing the determination of Filipino micro entrepreneurs to succeed at this trying time,” Diokno said.

Diokno and Citi Philippines Chief Executive Officer (CEO) Aftab Ahmed led the launch of the 18th CMA, which aims to give due recognition to outstanding microentrepreneurs.

The 2020 edition of the annual ceremony was modified to respond to community needs resulting from the impact of the Covid-19 crisis. This year’s program will be focusing on two main components: Covid-19 rehabilitation support package and recognition of outstanding microentrepreneurs during the Covid-19 crisis.

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