The Philippine Department of Trade and Industry (DTI) has launched a 4 billion peso ($68 million) loan program for micro, small, and medium enterprises, as the government moves to help smaller businesses cope with economic risks linked to the ongoing conflict in the Middle East.
Trade Secretary Cristina Roque introduced the MSME Business Fund in Makati City, saying the facility is meant to provide both immediate relief and growth capital for local enterprises facing a more uncertain operating environment.
The programme will be administered through Small Business Corp, the DTI’s financing arm. Under the scheme, qualified MSMEs can borrow as much as 20 million pesos, while loans of up to 5 million pesos will be extended without collateral requirements, according to the department.
The loans will carry repayment terms of up to five years, including a one-year grace period during which borrowers will not need to make payments on either principal or interest.
The relatively lenient terms are designed to make the facility accessible to smaller firms that may struggle to secure bank credit on affordable terms.
Applicants will be required to submit a government-issued identification card, a mayor’s permit, proof of bank account, business photographs and relevant corporate documents.
Roque said the department expects strong take-up for the facility, particularly as businesses grapple with rising uncertainty and cost pressures.
She also said the government could consider replenishing the fund if the initial allocation is used up before the end of the year.
The launch underscores the government’s concern that prolonged instability in the Middle East could feed into higher fuel prices, transport costs and broader inflationary pressures, which typically hit small businesses harder than larger firms with stronger balance sheets.
In the Philippines, MSMEs account for the overwhelming majority of enterprises and are a major source of jobs, but they often remain vulnerable to supply shocks and constrained access to financing.
The new fund suggests Manila is trying to get ahead of those risks by leaning on state-backed credit support.
Still, the success of the programme will likely depend on how quickly funds can be disbursed and whether the size of the facility is enough to meet demand if external pressures worsen.
