Amando M Tetangco, Jr: Setting a milestone with the Quezon City Credit
Surety Fund
Speech by Mr Amando M Tetangco, Jr, Governor of Bangko Sentral ng Pilipinas (the central
bank of the Philippines), at the Quezon City Credit Surety Fund lunch, Manila, 18 August
2014.
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Good morning everyone!
On behalf of the Bangko Sentral ng Pilipinas and our partner institutions - the DBP, Land
Bank and IGLF - we thank Quezon City under the distinguished leadership of Mayor Herbert
Bautista, Vice Mayor Ma. Josefina Belmonte-Alimurung, and the members of the
Sangguniang Panlungsod for launching its own Credit Surety Fund or CSF.
The Quezon City CSF is the first at the National Capital Region. This is therefore a significant
milestone in our program to promote CSFs across the country. This tells us that the local
government in Quezon City continues to find ways to support the further growth and
development of local micro, small and medium enterprises - or what we call MSMEs.
We know that through its Sikap Buhay Entrepreneurship and Cooperative Office, the city
government is pro-active in promoting access to credit, particularly for microfinance. This
time, by setting up its own CSF, Quezon City is scaling up to help more members of
cooperatives gain access to bank credit.
With the CSF, coop members with good credit standing can avail of bank credit even if they
still lack collateral and sufficient credit history.
On the part of the banks, CSF is a welcome program, as it provides opportunities to comply
with the mandatory 8pct credit allocation required under the law - RA 6977, as amended,
also known as The Act to Promote, Develop and Assist SMEs - under a more manageable
risk framework.
As a whole therefore, the CSF is a win-win program for coop members, banks and our
national goal to have a more inclusive financial system that will support inclusive growth.
Indeed, we have seen the initial benefits from our partnerships under the CSF. As of May this
year, roughly P1.1 billion in loans have been granted by 30 CSFs to nearly 10,000 MSMEs.
With Quezon City, we now have 31 CSFs: 14 in Luzon, 7 in the Visayas and 10 in Mindanao.
We look forward to seeing the benefits of CSF in Quezon City, our country's biggest city in
terms of population.
The importance of MSMEs to our country and our people cannot be overemphasized: they
account for 35.7% of our economy as measured by GDP, constitute 99.6% of registered
firms and employ 62% of our workforce. In other words, additional support granted to
MSMEs will have strong multiplier effects.
We are happy to learn therefore that Quezon City-based coops in cooperation with the Office
of the Mayor initiated discussions with the Bangko Sentral for the creation of its own CSF.
Thus today, we have 12 cooperatives who have initially contributed P3.95 million to the CSF
while the Quezon City government will give a counterpart contribution of P5 million.
Additional contributions will also come from DBP, LandBank and the IGLF. Let us therefore
thank Land Bank as represented by its President Gilda Pico; the Development Bank of the
Philippines represented by Chairman Jose Nuñez, Jr.; and the Industrial Guarantee and
Loan Fund represented by its Chief Executive Officer BenelLagua.
On our part, you can count on the Bangko Sentral's continued support to make this
collaboration sustainable. We will continue to advocate and introduce more innovations,
promote capacity building, and provide liquidity support through our rediscounting facility.
Finally, I can share that the Bangko Sentral is in final stages of discussions on new
partnerships with other LGUs and cooperatives to set up additional CSFs in the country.
Indeed, the spirit of cooperation of Bayanihan is alive and well in our country. If we sustain
this momentum, we can truly achieve sustained, balanced and inclusive growth.
Muli, maraming salamat. Mabuhay ang MSMEs! Mabuhay ang Quezon City! Mabuhay ang
ating mahal na bansang Pilipinas!