The state-owned Development Bank of the Philippines (DBP) has set aside an initial P5 billion for its factoring facility as part of its strategic support for the small- and medium-size enterprise (SME) sector.
"We are aggressively marketing this facility because DBP believes that factoring can be a powerful tool for SMEs, which are the backbone of our economy," said DBP president and chief executive officer Simon Paterno.
Factoring is one of the services that DBP had conceived way back in 1994 to help develop the SME sector. Until 2000, DBP has approved working capital lines for 64 clients and funding limits for 119 debtors or big brother companies.
Total account receivables purchased was P1.567 billion. However, Paterno said the bank's factoring operation was adversely affected by the slowdown of business activities in 2001 that has significantly reduced the volume of transactions for the past two years.
