The measure that will give micro, small and medium enterprises (MSMEs) better access to financing was approved by the Senate on third and final reading, according to its principal author, Sen. Bam Aquino.
Sen. Bam Senate Bill No. 1459 or the Personal Property Security Act hurdled the Senate on third and final reading via an overwhelming 21-0 vote. The House has already passed its version on 3rd and final reading.
“Makakatulong ito sa mga maliliit na negosyo na nahihirapan makakuha ng mga loan sa bangko. Suportahan natin ang paglago ng maliliit na negosyo na kabhuayan ng mga pamilyang Pilipino,” said Sen. Bam.
If passed into law, Sen. Bam said MSMEs will be allowed to use other properties, such as inventory and equipment, as collateral for loans. Usually, Sen. Bam said banks and other financial institutions prefer immovable assets like land.
“Sa panukalang ito, mas madali at mas ligtas para sa mga bangko ang magpautang sa mga maliliit na negosyo,” Sen. Bam pointed out, adding that banks are more likely to offer loans to our small businesses, thus helping them grow.
According to Sen. Bam, a former social entrepreneur, a successful business is a way out of poverty for many Filipinos.
“Ang pagpasa sa Personal Property Security Act ay pagsuporta sa mga maliliit na negosyo at pamilyang Pilipino,” Sen. Bam stressed.
Sen. Bam explained that assets of MSMEs are mostly personal in nature, including equipment, inventory, livestock, motor vehicles and receivables, which makes it difficult for them to meet bank requirements to get loan approvals.
With this measure, MSMEs can use these personal properties and assets as collateral in acquiring loans from banks and other financial institutions.
During the technical working group (TWG) conducted by the Committee on Banks, different financial associations and concerned government agencies have supported the passage of the measure.
Sen. Bam said the proposal can provide a win-win situation for both MSMEs and banks with a healthier loan environment.
Countries like China, Vietnam and Mexico have passed a similar measure and helped more than one million entrepreneurs and unlocked value amounting to $4 billion.
As an advocate of small business development, Sen. Bam passed several laws to support the sector, including the Go Negosyo Act, Youth Entrepreneurship Act, Philippine Competition Act, Foreign Ships Co-Loading, Microfinance NGOs Act and the Credit Surety Fund Cooperative Act.