1. Chamber of Thrift Banks Annual Convention Presentation by: BENEL P. LAGUA President and COO Small Business Corporation Department of Trade and Industry 23 March 2012

2. Good News Philippines is 75 in World Economic Forum 2011-2012 Global Competitiveness Report 3.7% growth in 4 th Q 2011, 52 nd consecutive quarter of positive economic growth since 1999 Inflation in 2011 is 4.8%, 3.3% in Jan-Feb 2012 7.0% unemployment rate for 2011, 7.4% in 2010 $20.12 B Remittances in 2011, up to 7.0% over 2010 Stock market at 5145 close on March 16, 2012

3. Blueprint for Industry Development 1.Support Key Industry Winners, e.g. Electronics Manufacturing, ICT/BPO, Tourism, Agribusiness 2.Strengthen MSMEs in Global Market 3.New BPOs, New Sunrise Industries, e.g. Shipbuilding, Agribusiness such as Coco Juice

4. MSMEs Vital for Dispersing New Industries Source: 2008 List of Establishments, NSO MSMEs: vital engine of the economy EmploymentFirms 39% 61% 99.6% 0.4 % MICRO SMALL AND MEDIUM 32% 68% LARGE MICRO SMALL AND MEDIUM LARGE 0.4% No. of establishments Value added 5% 99.6% MICRO RP Enterprises (761,409) MSMEs 99.6% (758,436) Large 0.4% (2,973) Micro 91.6% (697,077) Small 7.6% (58,292) Medium 0.4% (3,067) 99.6% of total firms 61% of employment 32 % of value-added 60% of all exporters

5. MSME Development Plan Components 1.Business and Investment Enabling Environment 2.Access to Finance 3.Access to Markets 4.Productivity and Efficiency GOAL: 40% value-added; 2 million jobs by 2016

6. SULONG Program Php 242 billion cumulative loans by the government financial institutions (GFIs) from 2004-2011 Planned renewal to include capacity building and addressing information asymmetry problem

7. Microfinance is Doing Well Financial Inclusion a major Achievement of BSP Policy Thrust Economic Intelligence Unit named Philippines as the best in the world in regulatory framework for micro finance BSP reports 198 banks, P7.1 billion O/B, 1 million borrowers; 23 are thrift banks Microfinance Program Committee reports 9 million clients in MFIs Microfinance loans up to P150,000, Microfinance Plus at P300,000 Loan size between P2,000 and P50,000 (mostly P5,000)

8. Mainstream SME Finance Needs Support IFC Scoping Study in 2006 estimates unmet demand of US$ 2.5 billion Overall compliance of banking sector with Mandatory Credit under Magna Carta for MSMEs is 7.37% for micro/small and 7.09% for medium Bank sector loan portfolio increased by 121.7% from 2001 to 2011 Micro/Small loan portfolio increased by 10.6% Medium loan portfolio increased by 77.5%

9. 20013 rd Q 2011Increase (in Php Billion) Percentage Increase Total Net Loan Portfolio992.242,199.441,207.2121.7% Total Direct mSE Loans144.18159.4515.2710.6% Total Direct ME Loans87.75155.8068.0577.5% No. of Operating Banks No. of Reporting Banks No. of Non-Reporting Banks No. of Non-Complying Banks 929 854 75 26 No available data from BSP’s new reporting system mSE Compliance Rate (vs 8.0% requirement) 15.64%7.37% ME Compliance Rate (vs 2.0% requirement) 9.43%7.09% BSP Report on Mandatory Credit

10. The Missing Middle Source: Young Global Leaders (World Economic Forum) As a Global Phenomenon

11. Challenges 1.Risk Based Lending 2.Capacity Building for SME Lending Technology 3.Financial Literacy for SME Clients 4.Usage of Guarantee Facilities 5.Convergence of Assistance

12. Chamber of Thrift Banks Expected as Key Contributor in the MSMED Council. Our Aim: Inclusive Growth. Thank You!!!