UnionBank, BPI promote MSMEs loan portfolios

UBP, BPI promote MSMEs loan portfolios


MANILA — Union Bank of the Philippines and the Bank of the Philippine Islands, two of the country’s largest banks are promoting their lending portfolios for MSMEs (micro, small and medium enterprises) severely affected by the pandemic.

“The default rate start of the MSME sector has been improving over the past few months with the partial reopening of the economy,” says Manuel Santiago, chief mass market and financial inclusion executive at Aboitiz-led Union Bank of the Philippines.

The bank’s current default rate is about seven percent, which had already peaked at nine percent. When they started to see a decline, Santiago said, the bank had to make adjustments in its underwriting processes for MSME loans affected by the pandemic.

“I can attribute the improvement in those adjustments that were made because as I said the underwriting criteria is obviously not the same as pre-pandemic,” he said.

UnionBank has helped its MSME clients in their repayment plan.

A little time was needed to recover. “And right now the portfolios are quite stable. It probably is due to the fact that our credit underwriting processes have been in place ahead of the pandemic,” he says.

Loans disbursed by banks contracted for the first time in 14 years after declining by 0.7 percent to PhP9.18 trillion in end of December, and banks were wary of the borrowers’ capacity to pay amid the pandemic.

The Ayala-led Bank of the Philippine Islands (BPI), meanwhile, entered into a partnership with the Department of Trade and Industry (DTI) to further support small and medium-sized enterprises (SMEs) as they recover from the effects of the global health crisis.

Its business banking head, Eric Luchangco says, “The bank recognizes its role in supporting companies and helping the economy grow as it aims to build a more financially inclusive Philippines.

“We hope that through this partnership with DTI, we will be able to make it clear to our SME customers that they are not too small to be served by a large bank.

“We believe they deserve to have access to the same kind of financial products and services that larger companies already have access to.”

Under a memorandum of understanding, BPI would support DTI programs such as “SME Roving Academy,” “Kapatid,” “Mentor Me,” “Youth Entrepreneurship Program,” including regional trade fairs.

To maintain a good rapport with its SME clients, BPI provides free trainings on ways to secure a business, manage and leverage on loans, and banking in the new normal.

DTI undersecretary Blesila Lantayona, in the same vein, says, “The agency is strongly committed to help MSMEs recover from adversities brought about by the pandemic and to thrive in the new normal business environment.

“As both parties commit to work together in teaching MSMEs nationwide to adapt and possibly pivot their businesses to the new normal, we look forward to the actualization of this MOU by looking at the greater visibility of BPI, especially in the programs and projects of DTI regional and provincial offices.”

Based on DTI’s partial impact assessment survey on the MSME sector, about 52 percent of enterprises have gone back to full operation, 42.8 percent have partially opened, while 4.9 percent are still closed.

Thirty to 35 percent SMEs were reported closed in April 2020. (JSM/JuanManila)

Eruption threat heightens in Taal

Phivolcs HQ


MANILA The increasing threat of steam blast eruption in Taal Volcano prompts Phivolcs (Philippine Institute of Volcanology and Seismology) director Renato Solidum Jr to issue a warning for everyone within the vicinity that the Taal Volcano Island is a permanent danger zone and is therefore a “No Entry” zone.

Already in the past 24 hours, Phivolcs has recorded more than 69 tremor events lasting five minutes.

“We also see the likelihood of hydrothermal activity, wherein gas from the magma rises, causing the waters beneath the Taal Volcano Island (TVI) to become hotter.

“This is also probably the reason why the main crater lake has become hotter and acidic,” says Solidum in a public briefing.


A number of earthquake occurrences recorded

Seismic activities (earthquake occurrences) and changes in Taal Volcano’s main crater lake have been observed as early as Monday. About 50 weak tremor episodes were recorded from 5 a.m. to 3 p.m. that day.

“There is an increasing possibility of a phreatic eruption, like what initially happened on January 12, 2020. The threat remains for the TVI, thus we remind that no one shall be allowed entry into the PDZ (permanent danger zone), which is the whole island,” he says.

Solidum warns that people are not allowed to return to the island, being a permanent danger zone.

“Phreatic eruption is fast, sudden. So if people are residing there (in the TVI) or they are asleep especially at night, it would be harder for them to respond,” he explains.

“So as a precaution, no one should reside there,” Solidum says.


Alert Level 1

The volcano is still under alert level 1 (abnormal).

Also, Solidum reminds the public to only rely on proper information sources, such as the official social media accounts of the DOST-Phivolcs and other concerned government agencies.

“There are file photos and should not be circulated or believed right away,” he said.

At present, around 18 families with 64 individuals have been evacuated. They were transported to evacuation centers in Barangays Tumaway and Aya, Talisay, Batangas. (JSM/JuanManila)

Moody’s: China jumpstarts regional trade, Asean economies still struggling

China jumpstarts regional trade


MANILA China jumpstarts recovery as export demands in the Asia-Pacific (APAC) region is gaining traction. But then, exports alone will not quicken Southeast Asian economies. That is according to a report from Moody’s economists Steven Cochrane and Sonia Zhu. They said exports to China are “a critical lifeline to the APAC region.”

Vietnam, Malaysia, Taiwan and Indonesia are key beneficiaries of this Chinese demand. In particular, Vietnam and Taiwanwhere manufacturing has close links to China—has outperformed the rest in the region and have made easy rebound to pre-pandemic levels.

Singapore, meanwhile, has posted a 7.9 percent year-on-year increase in non-oil domestic exports (NODX) to China in January, according to figures on Wednesday. That’s even as NODX to China dipped to S$26.4 billion in 2020, from S$28.7 billion in 2019.

China’s growing trade demand came after planners targeted export-oriented manufacturers, suppliers and ports in their Covid-19 recovery strategy.

“This focus on getting the production side of the economy back on track effectively allowed manufacturing to spark China’s recovery beginning in the second quarter of last year, and to lift surrounding Asian economies in the second half of 2020 as they eased up on many movement restrictions,” the Moody’s economists noted.

However, they said, “this trade alone is not enough to guarantee full economic recovery,” especially with markets such as Indonesia, the Philippines and Malaysia struggling to contain coronavirus outbreaks that could affect industry activity.

“Regional trade between China and the rest of APAC also depends upon stable demand for goods from Europe and North America,” the economists added.

As such, most of Southeast Asia is not expected to resume pre-pandemic output until early-2022. Thailand and the Philippines, which are highly dependent on travel, tourism and hospitality, will be the last to recover, the Moody’s report projected.

Moreover, longer-term economic challenges in the region include fiscal positions, household and corporate debt, structural changes in supply chains and , and the loss of employment and income from the pandemic downturn.  (JSM/JuanManila)