NEWSFLASH

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GOVT GUARANTEES LOANS, NOT INTEREST RATES

Manila, Feb. 3, 1998 - The government is prepared to guarantee loans, but not lower interest rates, for small and medium enterprises.

Trade and Industry Undersecretary Ernesto Ordonez said the government is prepared to guarantee up to P1.7 billion worth of loans through the Small Business Guarantee and Finance Corporation and the Guarantee for Small Business Program of the Livelihood Corporation.

But Ordonez said these loans will be at regular bank rates, which enterprises are willing to pay for in order to continue with their business operations. The credit lines are made available by banks because the government is providing the guarantees.

Ordonez reported that as of September last year, the government had made available a total of P124 billion or 13% of the banks' loan portfolio as against the P16 billion level when President Ramos assumed the presidency in 1992.

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