BSP chief cites need to help MSMEs bounce from pandemic

FILE: Bangko Sentral ng Pilipinas Governor Benjamin Diokno (PNA Photo)

MANILA – More assistance are being extended to micro, small, and medium enterprises (MSMEs) since the sector accounts for more than 95 percent of total firms in the country.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, in his speech during the launch of the Citi Microentrepreneurship Awards (CMA) 2020 Wednesday, said the share of the MSME sector to total employment is around 62.4 percent while its gross value added (GVA) is about 35.7 percent.

“More than ever, it is vital to sustain our microentrepreneurs, who provide essential products and services in the “last mile,” he said, citing the impact of the pandemic on the sector.

Diokno said most MSMEs are located in low-income areas and serve “as engines driving local economies.”

“Microentrepreneurs also nurture swathes of the Filipino population depending on them for post-pandemic recovery and rebuilding. Hence, the BSP is pulling out all the stops to support microentrepreneurs and SMEs,” he said.

Among the support that have been extended to small businesses include the increased lending by banks to the sector as these loans have been considered as compliance with reserve requirements, reduced credit risk weight on current MSME loans, and zero percent risk weights for loans covered by government guarantee programs.

In terms of the contribution of the private sector for MSMEs, Diokno said the two-decade CMA bodes well with the central bank’s bid to raise awareness on the opportunities and impact of the sector on inclusive development.

“Through CMA 2020, we highlight the creativity and internal fortitude of our microentrepreneurs to serve as a great inspiration,” he added.

During the same event, Citi Philippines Chief Executive Officer Aftab Ahmed said former CMA awardees have been given financial aid of up to PHP50,000, dubbed as the 2020 Covid-19 Rehabilitation Support Program, to cope up with the impact of the pandemic.

Another component of the SME rehabilitation program is underscoring the importance of small businesses in rebuilding the economy.

“It is essential for these businesses to learn to adapt as well as implement new strategies. This will be particularly important in the coming months as we start moving towards normalization,” Ahmed said.