That is because under the Arroyo administration six-year development program, the country wants to be servicing an additional six million microentrepreneurs. Of that total, the PCFC has been tasked to account for two million.
The PCFC is the lead government agency mandated to mobilize resources for microfinance services. It is supervised by the Land Bank of the Philippines (LBP), and it should get P500-million funding annually from the Philippine Amusement and Gaming Corp. (Pagcor).
At the end of July this year, the PCFC serviced 1,611,246 million microentrepreneurs accounting for an accumulative P7.5 billion in microloans. In the same period, the government financial institution (GFI) still holds on to an outstanding balance of P2.98 billion.
"We would be needing another P3 to P4 billion to meet the challenge set by the National Government’s development program," Edgar V. Generoso, PCFC president and chief executive officer said.
Generoso lamented that they were not allocated a single centavo in the 2005 and the proposed 2006 national budget. To attain the assigned target, the PCFC will be forced to borrow from other GFIs, such as the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP), or multilateral agencies such as the Asian Development Bank (ADB).
Generoso also revealed that they want a sovereign guarantee privilege to be able to directly seeks loans from multilateral agencies or other foreign government aid programs.
He revealed that Pagcor stopped extending funds to PCFC claiming that it turns over all its dividends to the national government. Thus the PCFC has to beg for funds from the national appropriations through the Department of Budget and Management (DBM).
Incidentally, the PCFC board chairman is also the LBP president.
After six months into 2005, it has resources amounting to P2.98 billion and total capital of P1 billion.
The PCFC wants to tap a P500 million from DBP’s microfinance lending window. It had already availed of P200 million from the same facility last year.
They are also negotiation for a new grant with Codespa, a Spanish foundation. In 2002, PCFC has already availed of a P10-million grant from the same foreign agency.
PCFC extends microfinance through participating financial institutions (PFIs) such as cooperatives, non-government organizations (NGOs), cooperative banks, and rural banks (RBs). "The entry of RBs actually speeded up lending to microentrepreneurs starting late 1999." – Ted Torres