Planbank Rural Bank of Canlubang Planters Inc. (Planbank) is looking to boost financial support for the local small and medium enterprises (SMEs) in San Pablo City, Laguna, that will enable businesses in the area to expand further and develop.
According to Planbank President Dominga Rufina S. Cabangon-Chua, various SMEs that produce quality goods and services can be found in the Laguna area, specifically San Pablo City, and thus the need to increase the provision of financial services and products.
“This is a relocation in terms of license. We thought that San Pablo City has more potential than that particular area [Poblacion]. One of the focuses that we have for this city are SMEs, because there’s a lot here with very good products,” Cabangon-Chua told the BusinessMirror.
The assessment led to the relocation of its branch to San Pablo City from Calamba City, Laguna, with the opening of the branch. Planbank is the largest rural bank in Laguna province.
“We feel that we will be successful here [San Pablo City],” she added.
Based on the 2015 census of the Philippine Statistics Authority (PSA), Laguna province has a population of around 3 million, with an estimated 266,000 in San Pablo City.
On putting up new branches this year, Cabangon-Chua look to open a branch in the province of Cavite next, pointing out that its proximity to the metropolitan area would also be beneficial for the bank.
“We want to look into Cavite as a different area. It’s also an exciting area right now and it’s closer to Metro Manila, so that is something that we are studying. We are definitely looking to expand in more lucrative sites,” she said.
She envisions the San Pablo City branch of Planbank to generate around 50 new accounts this year as they take into consideration the expertise of their newly hired branch manager who has been working in the banking industry for more than a decade.
“We are still working on the numbers. Currently, it’s the same number that we had for 2017. We are looking, at least for the year 2018, at around 52 [new accounts]. That would be a good number for us,” she added.
San Pablo City Mayor Loreto S. Amante said the establishment of Planbank in the city is a very welcome event as its presence will help more locals access its various financial services.
“The city is very lucky that there is a new bank that trusts us. We welcome Planbank. I know it will help more of our citizens who are in need of financial support,” Amante told the BusinessMirror.
In 2013 the ALC Group founded by Ambassador Antonio L. Cabangon-Chua acquired equity ownership of Planbank. It now has a total of 15 branches, with 11 of them in the province of Laguna, two in Batangas and another two in Bulacan.
Based on 2015 data from the Department of Trade and Industry, there are 900,914 establishments in the Philippines, with 99.5 percent, or 896,839, classified as micro, small and medium enterprises (MSMEs) and the remaining 0.5 percent, or 4,075, as large enterprises. Calabarzon is host to 131,011 MSMEs if segmented geographically.
Last year the Department of Finance committed to support the swift passage of legislative measures allowing the use of nontraditional collateral for loans to ensure greater financial
access by MSMEs.
According to Finance Undersecretary Gil S. Beltran, there are pending bills in Congress that seek to strengthen the existing secured transactions framework and modernize the country’s warehouse receipts system. These measures help ensure financial inclusion
for MSMEs.
The secured transactions law seeks to establish a legal framework for the use of nontraditional collateral, such as accounts receivable and inventory when applying for loans in financial institutions.
Modernizing the warehouse receipts system makes way for a computerized central registry for all warehouse receipts, which are used by farmers and other members of the agriculture sector as collateral to obtain credit.
Beltran underscored the need to empower MSMEs to realize the global goal of eradicating poverty, pointing out that these enterprises “are the life force of the regional economy, account for over 40 percent of the total economy, 97 percent of total enterprises and employ half of the labor force in the region.”
More than 40 percent of MSMEs in the region are hampered by lack of hard assets that can be used as collateral and a credible credit information system that banks use to make loan decisions, according to Beltran.