The Development Credit Authority (DCA) Loan Portfolio Guarantee (LPG) is a 10-year, Php4.18 billion ($95 million) credit guarantee program that encourages lending to businesses – predominantly small/medium enterprises (SMEs). The guarantee serves to stimulate targeted commercial investment and to increase the number of start-up SMEs in second-tier cities outside of metro Manila and surrounding regions in the Philippines.
DCA LPG is a USAID/Philippines program under the Partnership for Growth (PFG), a White House initiative. The PFG represents a partnership between the Philippines and the United States to promote broad-based and inclusive growth. The U.S. Government is working with the Government of the Philippines, the private sector and civil society organization to help put the Philippines on an accelerated growth trajectory that benefits the majority of its population.
USAID partner financial institutions each receive a DCA LPG, structured and funded according to size, scope and program offerings. These guarantees are intended to enable partner bank/financial institutions to expand their current portfolio caps and increase lending to businesses and SMEs engaged in productive activities. The DCA guarantee will cover up to 50% of potential net principal loss on qualifying loans for qualifying projects in priority sectors subject to the agreed guarantee ceilings.
A DCA guarantee, combined with planned technical assistance to participating banks and borrowers, will provide the needed support to allow for increased access to private capital and stimulate economic growth. DCA LPG will ultimately encourage lending, assist new enterprises and startups and support high-priority growth centers, facilitating Philippine economic advancement and development.
The DCA Guarantee works with selected Philippine private banks and financial institutions that include: Bank of the Philippine Islands, BPI Savings Bank, Security Bank Corporation, Philippine Business Bank, Philippine Savings Bank, and BPI Leasing. Technical Assistance support to the participating bank and borrowers will be provided by the USAID/Philippines COMPETE project implemented by The Asia Foundation.
To promote inclusive economic growth by encouraging lending to small and medium enterprises (SMEs) in the Philippines.
- Generate employment and economic growth in second-tier cities
- Stimulate targeted domestic, commercial investment and increase business expansion
- Post-harvest Agricultural Processing/Agribusiness
Office of Economic Development and Governance
U.S. Agency for International Development
Annex 2 Building, U.S. Embassy
1201 Roxas Boulevard 1000
Last updated: October 28, 2014