I.

TIME CONTEXT

January 2015, Mr. Erwin Idong was thinking about another year ending and a new
beginning. He reflected on where PCFC was when providing wholesale microfinance. Then he
wondered what more PCFC could do. He asked himself, How can he be able to reach those other
unserved potential microfinance end-client beneficiaries to uplift their lives through their product.

II. VIEWPOINT

Our analysis is based on the view point of Mr. Erwin M. Idong, Head of the Treasury Department
for Peoples Credit and Finance Corporation (PCFC).

III. STATEMENT OF THE PROBLEM

A. MAJOR PROBLEM

The major problem that has been identified is how could PCFC provide more funding to
the poor?

B. MINOR PROBLEM

The company also experiences the following as they fulfill their goals.

1. Difficulty in collecting funds from borrowers that were heavily hit by typhoon
and other calamities.

2. Borrowers began to engage in other loans to generate more profit such as

salary loans, vehicle and the like which are more secured than microfinance.

3. Tapping the unsaturated areas in the Philippines

IV. STATEMENT OF OBJECTIVES

A. Want or Long Term Objective

To provide affordable credit to the marginalized sectors of the population.

To provide the poor with access to livelihood credit and other microfinance
services through accredited partner microfinance institutions (MFIs).
 B. Need or Short Term Objective
Increase loan releases to conduits by 5% at the end of the year.
Widen the geographical coverage in terms of municipalities by 7% at the end
of the year.
To attain at least 10 new microfinance institutions partners annually.
Obtain 350,000 new borrowers for the year.
Reach 1,500 active microfinance institutions end clients trained.
Decrease processing cost range of loans from 4%-9.5% to 3.5%-9% at the end
of the year.

V. AREAS OF CONSIDERATION

A. SWOT ANALYSIS

B. SWOT MATRIX

C. PORTERS FIVE FORCES ANALYSIS

1. BARGAINING POWER OF SUPPLIERS

2. POTENTIAL DEVELOPMENT OF SUBSTITUTE PRODUCTS
3. BARGAINING POWER OF CONSUMERS
4. POTENTIAL ENTRY OF NEW COMPETITORS HIGH BARRIER TO ENTER
(LOW)
 A low potential of new competitors makes an industry more attractive and increases profit
potential for the firms already competing within that industry. Considering that the barriers to enter
the microfinance industry is high, PCFC threat of new entrants is not considered a major concern
of the institution.

Needing to have a high initial capital investment for possible entrants is a primary factor
to enter the industry.

Having been in the industry for more than 20 years and considered the pioneer in delivering
responsive financial services. PCFC has been successful in providing services to the marginalized
sector

PCFC, a government-owned and controlled corporation was specifically tasked to provide

wholesale funds for microfinance.

Strict government policies and regulations implemented for microfinance industry.

5. RIVALRY AMONG COMPETITING FIRMS

There are 200 banks and another 2,000 microfinance institutions (MFIs) in the Philippines
servicing at least seven million microfinance clients, based on a study released recently by the
Asian Development Bank (ADB).

The study reported that majority of the commercial banks catered indirectly to the
microfinance sectors-- through their socially-oriented foundations -- by providing wholesale funds
to private institutions engaged in retail microfinance services.

To be able to reach a larger number of entrepreneurial poor, the BSP is encouraging the
establishment of microfinance-oriented banks, and microfinance operations inexistent banks. The
BSP, however, emphasizes that microfinance is a serious business and institutions that want to
engage in it should be serious, well-prepared and committed to upholding the best practices and
high performance standards.

Several banks existing nationwide also offers a lot of credit loans and other financial
services.
D. STEEPLE FRAMEWORK

SOCIAL

TECHNOLOGICAL

ECONOMICAL

ENVIRONMENTAL

POLITICAL

The government assigned Peoples Credit and Finance Corporation to direct and administer
the Peoples development trust fund and for other purposes (EO No. 110)

In 2013, the BSP refined existing regulations on low-income households for purposes of
providing micro-insurance; improved procedures in the approval of housing microfinance loans
and micro-agri loans.

Executive Order 110 Section 1 clearly indicated that Peoples Credit and Finance
Corporation do not have any power to invest PDTF assets and other securities

LEGAL

Republic Act 8425 of 1998 (also known as the Social Reform and Alleviation Act) has
strengthened the PCFCs role in providing micro financial services, specifically for the
marginalized Filipino sectors. In accordance to the said law, the State should empower poor
Filipino families to meet their minimum basic needs as an act of intervention to poverty alleviation.

The National Anti-Poverty Commission (NAPC) issued an industry advisory containing

guidelines and model business development services manuals, and issued advisories on best
microfinance practices, including micro-savings and microinsurance.

SEC required microfinance NGOs to disclose their microfinance operations, which

promoted transparency.

Congress passed the Credit Information Systems Act, which provides for the establishment
of a central credit registry.
 ETHICAL

E. COMPETITIVE PROFILE MATRIX

VI. ALTERNATIVE COURSES OF ACTION

F. DECISION MATRIX

VII. RECOMMENDATION

VIII. CONCLUSION

IX. DETAILED ACTION PLAN