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Chamber of Thrift Banks Annual Convention

Chamber of Thrift Banks Annual Convention. Presentation by: BENEL P. LAGUA President and COO Small Business Corporation Department of Trade and Industry 23 March 2012. Good News. Philippines is 75 in World Economic Forum 2011-2012 Global Competitiveness Report

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Chamber of Thrift Banks Annual Convention

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  1. Chamber of Thrift BanksAnnual Convention Presentation by: BENEL P. LAGUA President and COO Small Business Corporation Department of Trade and Industry 23 March 2012

  2. Good News • Philippines is 75 in World Economic Forum 2011-2012 Global Competitiveness Report • 3.7% growth in 4th Q 2011, 52nd consecutive quarter of positive economic growth since 1999 • Inflation in 2011 is 4.8%, 3.3% in Jan-Feb 2012 • 7.0% unemployment rate for 2011, 7.4% in 2010 • $20.12 B Remittances in 2011, up to 7.0% over 2010 • Stock market at 5145 close on March 16, 2012

  3. Blueprint for Industry Development • Support Key Industry Winners, e.g. Electronics Manufacturing, ICT/BPO, Tourism, Agribusiness • Strengthen MSMEs in Global Market • New BPOs, New Sunrise Industries, e.g. Shipbuilding, Agribusiness such as Coco Juice

  4. Micro 91.6% (697,077) MSMEs 99.6% (758,436) Small 7.6% (58,292) RP Enterprises (761,409) Large 0.4% (2,973) Medium 0.4% (3,067) LARGE 0.4% 68% 99.6% LARGE MICRO SMALL AND MEDIUM 32% 5% MICRO SMALL AND MEDIUM Value added No. of establishments MSMEs Vital for Dispersing New Industries MSMEs: vital engine of the economy • 99.6% of total firms • 61% of employment • 32 % of value-added • 60% of all exporters 39% 0.4 % 61% 99.6% MICRO Firms Employment Source: 2008 List of Establishments, NSO

  5. MSME Development Plan Components • Business and Investment Enabling Environment • Access to Finance • Access to Markets • Productivity and Efficiency GOAL: 40% value-added; 2 million jobs by 2016

  6. SULONG Program • Php 242 billion cumulative loans by the government financial institutions (GFIs) from 2004-2011 • Planned renewal to include capacity building and addressing information asymmetry problem

  7. Microfinance is Doing Well • Financial Inclusion a major Achievement of BSP Policy Thrust • Economic Intelligence Unit named Philippines as the best in the world in regulatory framework for micro finance • BSP reports 198 banks, P7.1 billion O/B, 1 million borrowers; 23 are thrift banks • Microfinance Program Committee reports 9 million clients in MFIs • Microfinance loans up to P150,000, Microfinance Plus at P300,000 • Loan size between P2,000 and P50,000 (mostly P5,000)

  8. Mainstream SME Finance Needs Support • IFC Scoping Study in 2006 estimates unmet demand of US$ 2.5 billion • Overall compliance of banking sector with Mandatory Credit under Magna Carta for MSMEs is 7.37% for micro/small and 7.09% for medium • Bank sector loan portfolio increased by 121.7% from 2001 to 2011 • Micro/Small loan portfolio increased by 10.6% • Medium loan portfolio increased by 77.5%

  9. BSP Report on Mandatory Credit

  10. The Missing Middle As a Global Phenomenon Source: Young Global Leaders (World Economic Forum)

  11. Challenges • Risk Based Lending • Capacity Building for SME Lending Technology • Financial Literacy for SME Clients • Usage of Guarantee Facilities • Convergence of Assistance

  12. Chamber of Thrift Banks Expected as Key Contributor in the MSMED Council. Our Aim: Inclusive Growth. Thank You!!!

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