Press Release: Operationalizing the Personal Property Act (R.A. 11057) - Successful factoring conference of IFC and FCI in the PhilippinesMonday 3 December 2018
The Philippines’ Personal Property Security Act (Republic Act No. 11057) was passed in August 2018. This law seeks to increase access to finance for MSMEs and farmers through a stronger legislative framework for lending using movable assets (i.e., anything other than land). Following the passage of this law, the Government, stakeholders and the International Finance Corporation (IFC), a member of the World Bank Group, are now focusing on capacity building and educating the market on how to leverage on the various types of movable assets to use as collateral. The IFC and FCI Southeast Asia Factoring and Receivables Finance Conference was held in Manila on 28 November at Dusit Thani hotel. The event was attended by about 100 participants from Banks, officials, financial institutions and exporters. It was a truly South East Asia conference as participants came from Vietnam, Indonesia, Singapore, Malaysia and India. The event was opened by the Undersecretary Gil Beltran (Department of Finance, Philippines) with Deputy Administrator Ronald Ortile (Land Registration of the Philippines) delivering his speech in the afternoon. The Department of Finance and the Land Registration Authority are the lead agencies for the Personal Property Act in the Philippines with IFC as its technical advisor.
Gay Santos, IFC Senior Financial Sector Specialist, gave an update on the Personal Property Security Act, which was just passed this year. This law which covers accounts receivables as well will be a boon to factoring as it gives great certainty to assignment of receivables and established the right of assignment. This is the first law of its kind in Asia to help MSMEs to have access to financing and will be a good example for other Asian countries to follow.
The history of accounts receivables financing and factoring dates back to the Mesopotamian time. It has enabled trade effectively given that accounts receivables are current assets that are backed by actual goods and services delivered that financial institutions can bank on. In the Philippines, although factoring is already being practiced it has not reached its full potential of mobilizing finance to MSMEs. The event was meant to increase awareness of the benefits of accounts receivables financing and factoring to MSMEs. The event also marked the recognition of Acudeen as the first Philippine entity to join FCI. FCI is a Global Representative Body for Factoring and Financing of Open Account Domestic and International Trade Receivables. With close to 400 member companies in 90 countries FCI offers a unique network for cooperation in cross-border factoring. It was established in 1968.
The event was sponsored by VTeam Financial Service Group of China. Joyce Yang, Head of International Department of VTeam, gave a presentation on factoring and supply chain financing IT solution. Magellan Fetalino III, the CEO and founder of Acudeen explained how the technology made financing accessible to SMEs. FCI marketing committee members acted as speaker Roberto Weckop (Deutsche Factoring Bank, Germany), Ilyas Khan (Standard Chartered Bank, Singapore), Betul Kurtulus (Strateji Faktoring, Turkey), Sarah Pon (Unicredit, Italy), Joyce Yao (China Minsheng Bank, China) and Gwendoline de Viron (FCI). FCI Asia Chapter Director Lee Kheng Leong completed the speakers list. They gave their respective presentation on the world of factoring, mechanics of domestic and international factoring, risks and risks mitigation of factoring, marketing of factoring and case studies. Participants have a better idea of how works FCI two factors international factoring through our ever-popular role play on international factoring.
It was a very lively conference as there were many questions raised by the participants.
Based on the feedbacks and the interest by the participants, we are upbeat about the factoring market in Philippines. The success of this conference has prompted more request to deliver more of such conference in Philippines next year.