BANK loans to micro and small enterprises remained below regulatory minimums in the first quarter, Bangko Sentral ng Pilipinas (BSP) data showed.
Republic Act 6977, or the Magna Carta for MSMEs (micro, small and medium enterprises), requires banks to allocate at least 8 percent of their total loan portfolio for MSEs and 2 percent for medium enterprises (MEs).
Microenterprises are firms with assets not exceeding P3 million, small enterprises are those with assets up to P15 million, while medium-sized enterprises have assets between P15 million and P100 million.
While the mandatory credit allocation expired in June 2018, the BSP continues to monitor bank lending to MSMEs. Banks are required to submit quarterly reports of their released loans to the BSP, with penalties of up to P500,000 based on percentage of undercompliance.
As of the end of March, banks had a total loan portfolio of P12.4 trillion. This means they should have lent P971.47 billion to MSEs and P242.87 billion to MEs.
They loaned only P238.45 billion to MSEs, P733.02 billion short of the required amount. The end-March figure was similar to the last quarter but was higher than the P220.82 billion a year earlier. It comprised only 1.96 percent of the banks’ total loan portfolio.
On the other hand, banks loaned P336.35 billion to MEs, which was P93.48 billion higher than the required amount. The figure was similar to that of the previous quarter but higher than the P326.00 billion recorded a year ago and was equivalent to 2.77 percent of banks’ total loan portfolio.
Universal and commercial banks accounted for the bulk of the total loan portfolio at P11.03 trillion. These banks were supposed to allocate P882.02 billion for MSEs and P220.51 billion for MEs. In reality, they allotted P152.96 billion for MSEs and P276.23 billion for MEs — 1.52 percent and 2.50 percent of their loan portfolios, respectively.
Thrift banks, meanwhile, lent P49.01 billion to MSEs, or 3.88 percent of their total loan portfolio of P896.72 billion. Credit to MEs reached P38.97 billion, or 4.43 percent of their total lending.
Rural and cooperative banks exceeded the lending quotas, with MSE loans at P35.75 billion or 20.13 percent of their P177.59-billion portfolio. Loans to MEs stood at P21.08 billion, or 11.87 percent.
Digital banks lent P740 million in loans to MSEs, or 1.69 percent of their P43.8-billion loan portfolio. Loans to MEs reached P70 million, or 0.15 percent.
