With almost 900,000 jobs already created
Angara sees greater prospects for
Philippine microfinance in 2009

Sen. Edgardo J. Angara today emphasized the role of microfinance in boosting job generation for the country amid the fears of massive lay-offs in the world's leading economies brought about by the Global Financial Crisis.

"We are expecting more bad times ahead of us as the Global Financial Crisis is already pinching the country. Now, our focus should be on providing our people with livelihood and jobs in order to give them the necessary spending power to surmount the credit crunch," said Angara who chairs the Senate Committee on Banks, Financial Institutions and Currencies.

He added, "With the approval of the Credit Information System Act (CISA) we expect to improve the availability of credit especially to small and medium scale enterprises (SMEs). These SMEs in turn would boost our country's capability to generate more jobs and provide income to our people."

According to the People's Credit and Finance Corp. (PCFC), 859,569 jobs were already created from micro-finance efforts in the first three quarters of 2008. This number represents an increase of 289,449 jobs from last year's accomplishment over the same period.

Amount of loans extended to micro-finance conduits has also more than doubled from the first three months of 2008 as compared to 2007, from Php 25.945 billion in 2007 to Php 53.634 billion this year.

Angara expects to improve these accomplishments in 2009 through the enactment of the CISA.

The Credit Information Corp., which was created by the act, will provide for a credible and comprehensive credit information system which can cut credit processing time and lower transaction costs thus reducing the risk of default with better credit information.

Through CISA, lenders can now charge less credit premiums. CISA is also expected to increase lending volumes and will help expand the reach of credit to small and medium enterprises.

Angara also expressed hope in establishing the Real Estate Investment Trust (REIT) system of the country. This, he said, is another investment mechanism that will allow small investors to gain profits from income-generating real estates.

"The main purpose of real estate investment trusts is to provide small and large investors alike with the opportunity to participate directly in the ownership and financing of large-scale real estate projects at affordable rates of investment, without the disadvantages of illiquidity, high transaction and management costs, as compared to traditional private real estate ownership," Angara added.

REITS would not only allow the Philippines to participate in the globalization of the real estate investment markets, but, more importantly, contribute to the growth and development not only of the capital market but also the national economy through increased investment activities.

REIT, which is ready to be tackled in Senate plenary discussions, supports the growth of the BPO and tourism industry in the Philippines. This will also serve to attract foreign direct investments in real estate, thereby stimulating much-needed property and infrastructure development in the Philippines.