BALI, INDONESIA— Government interventions are in place to address trade finance gaps in the Philippines as part of global efforts to narrow the global trade finance gap, which is at around USD1.5 trillion every year, the National Economic and Development Authority (NEDA) said.
At the sidelines of the 2018 Annual Meetings of the International Monetary Fund-World Bank Group (IMF-WB), Socioeconomic Planning Secretary Ernesto M. Pernia said such efforts of the government are in the context of making financing more inclusive.
“We need to boost financial services to help our small and medium enterprises. More importantly, such services will establish an inclusive financial sector,” Pernia said.
Pernia said Republic Act No. 11057 or the Personal Property Security Act, among other government initiatives, strengthens the legal framework for the use of personal property as collateral, and establishes a modern, centralized online collateral registry.
The Personal Property Security Act was signed into law last August 17.
“We expect this to make financing more accessible to Filipino SMEs, including export-oriented firms,” he said.
“The Bangko Sentral ng Pilipinas is also strengthening retail payments systems by adopting the National Retail Payments Systems framework, or NRPS. This should facilitate more convenient, affordable, and secure electronic fund transfers and payments,” Pernia added.
The Secretary also said the government is increasing credit guarantees from PhP10 billion to PhP50 billion for SME exporters through the Philippine Export-Import Credit Agency (PhilEXIM), an attached agency of the Department of Finance.PhilEXIM provides guarantees to facilitate foreign loans of export-oriented industries, public utilities, and those registered with the Board of Investments.
Pernia noted that the Philippine Development Plan 2017-2022 identifies the need for a resilient and inclusive financial sector. It lays down strategies such as strengthening the effectiveness of financial inclusion initiatives, encouraging efficiency and innovation in microfinance and microinsurance, and developing the legal infrastructure for Islamic finance, among others.
Secretary Pernia is with Budget Secretary Benjamin Diokno, Finance Secretary Carlos Dominguez and Central Bank Deputy Governor Diwa Guinigundo in Bali, Indonesia, for the 2018 IMF-WB Annual Meetings, which carries the theme, Harnessing Disruption to Shape Inclusive Economies of the Future.
Pernia is representing the country at the Early Adopters Ministerial Roundtable on the Human Capital Project, the ASEAN Forum on Implementing the Sustainable Goals, and a meeting with WB President Jim Yong Kim on Human Capital Development.