THE Asian Development Bank (ADB) has opened a credit facility that targets small- and medium-size companies which usually find it difficult to access credit, especially at this time of a global credit crunch.

Philip Erquiaga, ADB private-sector operations department director general, observed that, “in the Philippines, small-  and medium-sized firms employ around 77 percent of all those working in the manufacturing sector. If those firms can access more trade finance, they will be able to expand and employ more workers. That would boost personal incomes and help to reduce the country’s poverty levels.”

Neeraj Jain, ADB country director for the Philippines, said the $500-million window under the bank’s Trade Finance Facilitation (TFF) Program has five participating local banks—Allied Banking Corp., Development Bank
of the Philippines, Metropolitan Bank and Trust Co., Philippine National Bank and Rizal Commercial Banking Corp.

The fund, about P22.5 billion in peso terms, would be used by the five local banks for wholesale lending to traders. There is no limit to how much a bank can borrow from the TFF Program. The ADB said the banks can package the loans at current market rates.

The Philippines becomes the 10th country that has a bank-signing authority in the TFF, a nine-year-old program that has supported over 1,200 transactions valued at over $662 million in eight developing member-countries: Afghanistan, Azerbaijan, Bangladesh, Nepal, Pakistan, Sri Lanka, Tajikistan and Vietnam.