MANILA, Philippines — Loans extended by banks to micro, small and medium enterprises (MSMEs) rose in the first quarter but still fell short of the mandated credit allocation under the law, the Bangko Sentral ng Pilipinas said.
Based on BSP data, total MSME loans grew by 15 percent to P546.82 billion in the first quarter from P475.12 billion in the same quarter last year.
Despite the increase, banks only set aside 4.63 percent of their total loan portfolio for MSMEs. This is less than half of the 10 percent required under the Magna Carta for MSMEs (Republic Act 6977, as amended by RA 8289 and RA 9501).
The law requires banks to allocate eight percent of their total loan portfolio for micro and small enterprises and two percent for medium enterprises.
The BSP said the industry’s loan book, excluding certain qualified deductions, grew by nine percent to P11.82 trillion as of end-March from P10.79 trillion a year ago.
That means banks should have earmarked at least P1.18 trillion in credit for MSMEs.
Of the total, loans to micro and small enterprises climbed by 15 percent to P220.82 billion from P191.46 billion. However, this only met 1.87 percent of total loans, far below the required eight percent or P945.5 billion.
Meanwhile, loans to medium-sized businesses rose by 14.9 percent to P326 billion from P283.66 billion, enough to meet and even exceed the two percent quota. This translated to a 2.76-percent compliance, above the required P236.38 billion.
Broken down by bank type, universal and commercial banks lent P152.3 billion to micro and small businesses, just 1.41 percent of their P10.8-trillion loan portfolio. Their loans to medium enterprises hit P266.43 billion, meeting a 2.47-percent compliance.
Thrift banks performed slightly better, allocating P28.31 billion to micro and small firms or 3.9 percent of their P736.15-billion loan book. For medium enterprises, they lent P39.25 billion, breaching the quota at 5.3 percent.
On the other hand, rural and cooperative banks continued to be strong supporters of micro and small businesses, extending P39.66 billion in loans or 16.2 percent of their P245.1-billion portfolio.
The compliance of rural banks to medium enterprises also stood at P20.26 billion or 8.3 percent of their loan portfolio.
