STATE-owned Philippine Guarantee Corporation (PHILGUARANTEE) has partnered with Discovery Capital Finance Corporation (DCFC) in a move set to push billions of pesos in new credit into the country’s small-business sector and expand lending to Micro, Small, and Medium-sized Enterprises (MSMEs) by sharing loan risks and lowering borrowing costs for entrepreneurs nationwide.
PHILGUARANTEE has formalized a strategic partnership with DCFC, one of the country’s fastest-growing financing firms, to widen credit access for small and medium enterprises, particularly in underserved provinces.
Under the agreement, PHILGUARANTEE will provide credit guarantees for loans issued by DCFC, allowing the lender to absorb less risk and free up more capital for MSMEs, long considered the backbone of the Philippine economy.
DCFC President and CEO Diosdado Salang Jr. said the sovereign guarantee strengthens the company’s ability to lend competitively. “The guarantee from PHILGUARANTEE covers a portion of the outstanding principal, protecting us from credit risk,” Salang said. “This reduces our exposure, lowers our cost of funding, and allows us to extend credit to a broader segment of the market.”
The collaboration is expected to yield three immediate benefits for small businesses:
• Increased access to loans for micro to mid-sized firms previously deemed too risky;
• More competitive interest rates, as lower institutional risk translates to friendlier borrowing terms; and
• Faster regional economic growth, with DCFC’s extensive nationwide network able to funnel capital to local businesses across Luzon, Visayas, and Mindanao.
Both institutions framed the partnership as a major commitment to financial inclusion, one that aims to remove long-standing financing barriers and empower high-potential MSMEs to scale and grow.