Pondo sa Pagbabago at Pag-asenso (P3) program to replace “5-6” money lending system. - PH Trending

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Wednesday 11 January 2017

Pondo sa Pagbabago at Pag-asenso (P3) program to replace “5-6” money lending system.

What is the main goal of Pondo sa Pagbabago at Pag-asenso (P3) program?

  1. to replace the “5-6” money lending system or the so-calle "Bombay" which has 20% interest rate.
  2. to provide an affordable micro-financing for the country’s micro, small and medium enterprises (MSMEs)
  3.  to bring down the interest rate at which micro-finance is made available to micro enterprises.
  4. helping hte poorest


  • initial funding of P1 billion for financial assistance for the year 2017
  •  P19 billion financing initiative for micro and small businesses in the next five years.

How it works?

  • P3 fund will be lent out in the business centers of the poorest provinces (based on poverty incidence), through the participating microfinance institutions (MFIs) and the Small Business Corporation (SB Corp.)
  • Program Management Office (PMO) - oversee the management and monitoring of fund.
  • According to Sec. Lopez, “Fund delivery to microenterprises shall be carried out in either by wholesale lending to non-bank financial institutions like MFI-NGOs, and cooperatives which shall on-lend the fund to beneficiaries or by direct lending by SB Corp.” 
  • Loanable amount per end-borrower can range from P5,000.00 for start-ups to P300,000.00, with maximum interest rate of 26% per annum with no collateral requirement. This rate is significantly below the 20% per day/ week/ month charged by “5-6” lenders. It is also lower than what is charged by most MFIs.
  • MFIs may opt for portfolio guarantee cover of up to 15% of their P3 loan portfolio from SB Corp at a guarantee fee of 0.4%. The guarantee feature is seen to help MFIs address the P3 Program’s inherent risk. The guarantee fund will be sourced from the P3 fund.


  1. micro-enterprises and entrepreneurs (micro-entrepreneurs, market vendors, agri-businessmen and members of cooperatives, industry associations and co-operators) (DTI, 2017)
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