'More loans for MSMEs to help slow inflation'.
President Duterte wants to set aside an additional P4 billion for the microlending program of the Department of Trade and Industry (DTI) to drive loan sharks out of business, according to Agriculture Secretary Emmanuel F. Pinol.
Pinol said the measure was brought up by the President while he and other government officials discussed the spike in the retail prices of farm products during an eight-hour Cabinet meeting on June 11.
The chief of the Department of Agriculture (DA) said one theory that came up during the Cabinet meeting is that the capitalization woes of micro, small and medium enterprises (MSMEs) force them to jack up the price of farm goods.
'During the Cabinet meeting, the President said he may have to add another P4 billion to the DTI's lending program this year,' he told the BusinessMirror.
'The target right now is to neutralize predatory loans extended to vendors, who, because of the onerous interest rates, are forced to hike their prices to recoup their cost. At the end of the day, it is only the loan sharks who are earning,' Pinol added.
Pinol noted that the DTI has observed a large discrepancy between the current farm-gate price and retail price of broiler in wet markets.
'There was hardly any increase in the prices of chicken at the farm gate but when it reaches the wet market, the price doubled,' he said.
'The farm-gate price of broiler right now hovers between P75 to P80 [per kilogram] but based on the monitoring of the DTI, the [retail] price is P150 [per kilogram]. So, where did the 100-percent increase in price come from?' he added.
The DA chief dismissed the statement of some sectors that the Tax Reform for Acceleration and Inclusion (TRAIN) law is behind the increases in the retail prices of agriculture products.
'So why are prices increasing? The TRAIN law only has a very minimal effect, and if there is an oil price increase, its effect would be less than 1 percent,' Pinol said. 'The No. 1 reason would be speculation. And the other is the reality that our vendors are dependent on loan sharks.'
Pinol said the DA would release its SRP matrix for farm products next week.
The DTI is pilot testing its Pondo sa Pagbabago at Pag-asenso (P3) program, a microlending program that seeks to replace the '5-6' money lending system, this year. The P3 program aims to provide MSMEs access to more affordable credit.
'The P3 is designed to bring down the interest rate at which microfinance is made available to micro enterprises,' Trade Secretary Ramon M. Lopez said.
Interested borrowers could loan from P5,000 for start-ups, to P300,000 with a maximum interest rate of 26 percent per annum with no collateral requirement, according to the DTI.
The government has allocated P2 billion for the P3 program this year.
|Printer friendly Cite/link Email Feedback|
|Publication:||Business Mirror (Makati City, Philippines)|
|Date:||Jun 12, 2018|
|Previous Article:||NFA defers to late-June auction for importation of 805,200 metric tons of rice.|
|Next Article:||Government trims funds allocated for Marawi rehab.|