Maraming salamat Cesar Navarro, binabati ko kayong lahat mga big and small businessmen lalung-lalo na ang mga leaders ng banking community dahil sa ang inyong tulong ay ang magpapatakbo nitong ating SBGFC.

You know, most alphabet combinations are subjects to some kind of an acronym, but the SBGFC simply defies simplification. Kaya siguro dahil sa nag-uumpisa tayo sa isang bagong innovation kagaya ng SBGFC tatawagin muna nating small “buga”. Ang gustong sabihin niyan ay small “buga” na lalaking lalaki.

I would like to greet our dear authors and sponsors of this milestone piece of legislation, republic act 6977, congressman Gary Teves and Senator Letty Shahani, Mrs. Tan and all the supporters and admirers of the small “buga.” Included in the resurgents from my blood from the guest house is Ambassador Emmanuel Pelaez who is our consultant on economic and foreign affairs. But today I would like to tell you that I have just appointed him as the chairman of the national electrification administration. Iyan ay para sa mga small “buga” rin.

This is a happy day for the small businessmen in our country, and i am proud and pleased that I can take part in the formal launching of the small business guarantee and finance corporation.

The credit for creating this public body belongs to the Eighth Congress, which passed Republic Act 6977, otherwise known as the Magna Carta for Small Enterprises. We are delighted that the principal authors, Congressman Teves and Senator Shahani are with us this morning.

I am also especially happy that the SBGFC is commencing its program today because, as already mentioned in the story board presentation and in the two speeches of our authors, this complements the people empowerment program of my government.

There are many who thought that empowerment of our people was merely a political slogan for my election campaign, and now that I have won, it can be put aside. Well, on the other hand, we mean to give true and complete fulfillment to the concept of political and economic empowerment of ordinary Filipinos. One of the very tasks I gave to our czar, Secretary Roy Navarro from day one was to make sure that the implementing rules and regulations to RA 6977 would finally be completed.

You will note that this Republic Act was passed as early as the end of December 1990 and for many, many months in spite of the expectations of many of our family and small entrepreneurs, the implementation of the law was not put into effect.

And so I cite this because this is an indication of the sincerity and the political will of this administration, to help the little Filipinos.

There are also some serious misconceptions of both the program and the philosophy behind this law.

When I speak of people empowerment, I have always stressed that the critical idea is to empower individuals, groups and communities throughout our country. Necessarily, much attention must be devoted to those poor communities who have such little part in our national life today.

But there should be no doubt that the whole program is meant to cover all who constitute our society — no one has been left out — the small businessman, the big businessman, the professional, the policeman, the soldier, the civil servant — and the ordinary Filipino households — in short, everyone whose talents and energies are critical for the engineering of development for our country.

That is why I welcome the Magna Carta for Small Enterprises and the launching of the SBGFC, because I consider them important instruments for empowering the small people of the land.

The importance we attach to small and medium enterprises cannot be overstated. Today, this sector already contributes much to our gross national product. The contribution is especially significant in the case of small business because so much of its activity takes place in our so-called “underground economy,” helping generate jobs, promoting commerce, and providing a safety net for our small countrymen who do not have regular formal jobs.

But great as the contribution of small business already is, there is much, much more that can be done. The potential for growth is incalculable, if we can build an economic environment wherein small entrepreneurs can flourish, and if our government and financial system can marshal their resources for the development of new and existing small enterprises.

This is the rationale for the Magna Carta, and the reason for being of the SBGFC — to build a business environment conducive to small and family enterprises.

The key elements of such an environment are well-known.

First, we need to complement and supplement financing programs for small enterprises and do away with stringent collateral requirements that small entrepreneurs cannot provide.

By the way, may I suggest, kahit na naka-bakya o naka-jeans o naka-tsinelas iyong mga umuutang sa mga bangko sa ilalim nitong small “buga” eh pagbigyan natin. Dahil sa iyan ang palaging reklamo ng ating mga magsasaka, mga mangingisda at ang mga mayroong small family enterprises. Lalung-lalo na sa ating mga probinsiya.

Second, we must intensify and expand programs for training in entrepreneurship and skills development for labor;

Third, we must facilitate access for the small businessmen to financing;

Fourth, we must institute safeguards for the protection and stability of the credit delivery system;

And finally, we must promote linkages between large and small enterprises, and encourage the establishment of common service facilities.

The example of South Korea with which i am very familiar having stayed there during the Korean War in 1952 and I saw the country devastated from north to south, from beyond the 38th Parallel down to the southernmost big city. I also saw how they recovered and in 35 years they were on the threshold of becoming an economic tiger which we very much admired. Pero dito po nag-umpisa sa small “buga” iyong economic dragon ng South Korea ngayon. They started with families and households making uniforms to start with for their armed forces. Doing things by hand or mostly by manual labor. The secret however was that government supported this family and small enterprises from the very beginning and made sure that they were not overwhelmed or overcome by big business. And after 15 years they have organized their so-called model village system. I saw in the late 70s farming villages where they have a community center which was the multi-purpose assembly hall for the residents of the village making export class dresses, shirts. They have all kinds of levels. Mayroong arrow shirt, mayroong Manhattan and there were some also in unknown languages to me. I have a feeling they were even selling to third world countries, to the communist countries. They were also manufacturing wigs of all kinds. Kaya iyong mga red head blondes, brunettes, silver hair noong araw na nakikita natin, ang mga iyon eh gumagamit ng wigs na hindi gawa sa Amerika. Gawa sa South Korea iyan. Pretty soon they will advance into electronics, then to heavy equipment. Eventually, the whole thing based on this small enterprise system, develops into an economic tiger.

So there is plenty for us to learn. But at the same time there is plenty for us to do.

As you will see in the inventory of needs, the role of the financial sector in the achievement of these tasks is very critical. The government, on its own, cannot provide the funds needed to really unleash the talents and energies of our small businessmen. Our banking sector must also, always do its part.

And kindly read this special provision near the end of the law, section 14. Hindi ko na sasabihin kung ano iyon. Mabigat ang inyong responsibility.

Today, I ask our banking community to now fully live up to their responsibility under the law. Let us once and for all recognize as a people how much the economy and the nation will benefit from the development of small enterprises.

Let us give our small entrepreneurs a chance.

In return for the commitment of our bankers, government commits to support them in this task. We stand ready to provide guaranteed mechanisms that shall enable financial institutions to minimize their risks in lending to small enterprises. We commit our resources in government to effectively provide the necessary support to make the small enterprise a viable, a profitable and a sustainable undertaking.

This is what the small business guarantee and finance corporation stands for.

Towards this end, the new corporation will initially offer the banking sector a guarantee mechanism designed to cushion its entry into small enterprise lending. In effect, in order that the banks and other financial institutions may be encouraged to lend to small entrepreneurs, the SBGFC shall shoulder up to a maximum of 85 percent of the risks.

This will effectively minimize the risks that banks have to bear in dealing with small entrepreneurs.

In order that banking institutions will be encouraged to support the small enterprises, I now pledge to fully strengthen this guarantee system. Government will ensure the immediate release of the initial capitalization of one billion pesos today to this guarantee corporation, and to fully back-stop its guarantee to lenders. This capital will come from equity contributions of the five biggest government financial institutions, namely PNB, SSS, LBP and DBP. Kasama na rin pala ang GSIS, nandito si Chairman Magno, I don’t know where the others are. Nandito pala si Jesli Lapus ng Land Bank. But I guarantee even for those who are absent.

Our total program for business involves nearly all the departments and local governments in the effort. Besides financing, we intend to create a really genuine climate in which small entrepreneurs can thrive –a peaceful, secure and competitive environment. We shall provide help in management and skills development training. We will also help local governments to become active partners of small business in their communities.

In closing, let me stress the principle that will guide all of us.

We in government are here to serve enterprise, small and large, not supplant it.

And to truly empower our entrepreneurs, we in government must assist them, and not stand in their way.

The Small Business Guarantee and Finance Corporation is one manifestation of this commitment. And this is an important part of people empowerment.

Thank you, salamat po sa inyong lahat.