Background

For the year 1998, the National Credit Council (NCC) through the United States Agency for International Development (USAID) funded project, the Credit Policy Improvement Program (CPIP) completed ten (10) studies on credit policies. Eight (8) of the studies were published in Policy Notes and were distributed to the different government agencies, institutions, credit stakeholders and various researchers.

Policy Reform

To ensure that the NCC's credit policies were adopted, the NCC together with CPIP consultants participated actively in the formulation of the Implementing Rules and Regulations (IRR) of two significant laws enacted in 1997. The NCC actively advocated for the passage of RA 8435 or "Agriculture and Fisheries Modernization Act (AFMA)" and RA 8425 or "Social Reform and Poverty Alleviation Act (SRPA)"

The National Strategy for Microfinance, finalized by the NCC with the help of CPIP in 1997, was presented to the Donor's Working Group on Poverty Alleviation on March 9, 1998. The meeting was made possible in coordination with the Consultative Group Secretariat (World Bank). It was organized in order to provide donors with information on NCC credit policies. The Strategy was likewise presented during the Second Annual Micro-Credit Summit in New York on June 24 to 26, 1998.

For better understanding and appreciation of microfinance, the NCC member agencies participated in the following learning activities (a) Study visit to microfinance Institutions in Latin America (March 26 to April 8, 1998) and (2) courses on microfinance at the Economics Institute in Boulder, Colorado, USA (June to July 1998).

Credit Policy Planning and Formulation

In order to prioritize the activities of the NCC and to review the progress of CPIP, a planning conference was held in Mimosa Resort in Pampanga on July 15 to 17, 1998. It was attended by the members of the NCC Executive Committee, the NCC Secretariat, CPIP consultants and the USAID Project Officer. Measures to be undertaken relative to the rationalization mandate of the NCC were discussed. The NCC Executive Committee adopted in principle a revised set of credit policies. A draft Executive Order (EO) containing the revised credit policy guidelines was formulated and was formally adopted via referendum. The draft EO was presented to the different cabinet clusters for comments with the end in view of endorsing the same to the President for his signature.

The four sub-groups of the NCC were consulted through a series of workshops (August 11 to 14, 1998) on the framework for the rationalization of directed credit programs (DCPs). A prescribed rationalization program for each DCP under each sub-group was presented, to which the sub-groups agreed to endorse and adopt.

Other Policy and Advocacy Initiatives

In September 1998, the Technical Board of the Investment Coordinating Committee (ICC) started requiring NCC endorsement of lending components of proposed foreign loans. As of December 31, 1998, the NCC Executive Committee reviewed and endorsed six (6) project proposals to the ICC Cabinet.

As mandated in the AFMA and its IRR, the NCC in coordination with the Agricultural Credit Policy Council (ACPC) initiated the drafting of the Agro-Modernization Credit and Financing Program (AMCFP). The draft was presented to and approved in principle by the NCC Executive Committee. The draft AMCFP was subjected to regional consultation workshops conducted by the NCC and ACPC in coordination with CPIP. It was presented first in Mindanao (Davao) on December 3 to 4, 1998 and then in Southern Luzon (Pasig City) on December 9, 1998.

The members of the NCC Secretariat continued their advocacy on government credit policy during their attendance to different meetings and workshops. These include the Policy Advisory Group Meetings of the Microfinance Coalition for Standard, Microstart Advisory Board, National Economic Summit, National Microcredit Summit, Workshop on Social Development, Investment Coordinating Committee Technical Board (ICC TB), People's Credit and Finance Corporation (PCFC) Board Meetings, Workshop with the Basic Sector; Foundation for Sustainable Society, Inc. (FSSI) Board Meetings, and briefings to the newly appointed heads of the various NCC member-agencies.

The NCC-CPIP Lotus Notes Network installed in October 1997 was continually developed to facilitate the exchange of information and data among the NCC member agencies. In 1998, the said network was installed at the Project Office, USAID (February 12), Agricultural Credit Policy Council (April 27), Bureau of Rural Workers - Department of Labor and Employment (28 April), Small Business Guarantee and Financing Corporation (May 5), Peoples Credit and Finance Corporation (May 8) and Development Bank of the Philippines (June 22).