EDC wants extension of Magna Carta for MSMEs

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The Export Development Council (EDC), the public-private group monitoring the implementation of the Philippine Export Development Plan (PEDP), is pushing for a 10-year extension of the Magna Carta for micro, small and medium enterprises (MSMEs).

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EDC Deputy Executive Director Emma Mijares said the proposed 10-year extension takes into consideration that Republic Act 9501 of 2008 will expire in 2018.

“So we are proposing a 10-year extension and we are gainfully getting the support of some congressmen,” Mijares said. The council is push for the approval of its proposal in the 17th Congress.

Mijares noted that the Magna Carta is one of the ways the council is looking at to strengthen MSMEs, particularly in the primary concern of financing enterprises.

“From the very beginning, that is the complaint of the exporters —access to trade financing,” the EDC chief said.

Mijares said the council is continuing to look for sources of MSME financing as mandated in the 2015-2017 PEDP.

“A quick fix to the long-standing problem of export financing is the full implementation of the Magna Carta for MSMEs, specifically the mandatory allocation of credit resources to the target beneficiaries of the law,” she said.

RA 9501 or the Magna Carta for MSMEs defines the current national policy to promote, support, strengthen and encourage the growth and development of MSMEs. The law was originally enacted in 1991 as RA 6977, amended in 1997 as RA 8289, and further modified in 2008.

Mijares said the government should also extend more credit guarantees and explore more sources of financing to assist exporters that are mostly MSMEs.

She said the council is exploring other strategies to increase the credit guarantees of the Philippine Export-Import Credit Agency (Philexim) and Small Business Corp. (SB Corp.) which is the lead agency for MSME development.

SB Corp.’s venture into “risk-based lending” will benefit enterprises as it does not involve any collateral and will serve as an alternative method of financing.

The council is also seeking the assistance and cooperation of multilateral lenders such as the World Bank and Asian Development Bank to help finance long-term projects.

“We will need the help of the private sector on what projects to pursue,” Mijares noted.

The 2015-2017 PEDP serves as a blueprint to a supportive business environment for domestic industries. The aim is to establish their niche markets in the region and globally, and support the government in reaching an export growth target of 8 percent to 9 percent.

The plan was approved by President Benigno Aquino 3rd on February 4 through Memorandum Circular No. 91.

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1 Comment

  1. When will this take effect? I hope immediately. Most shops would always give a “palusot” that they have not received a memorandum yet so they do not implement as soon as we want them to.