DTI and First Circle renew SME support partnership for the 3rd time

Editor’s note: This article was originally published in August 2023. DTI and First Circle have since renewed their partnership for a fourth time, covering 2026 to 2028. Read the latest update here. Product details below reflect First Circle’s offering at the time of the 2023 signing. See the Business Credit Line page for current terms.

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For the third time since 2018, the Department of Trade and Industry (DTI) and First Circle renewed their partnership to foster competitiveness and growth in the Small and Medium Enterprises (SMEs) sector.

The renewed Memorandum of Understanding (MOU) was signed during a ceremonial event held at the DTI-Board of Investments Building in Makati last 13 July 2023. This was led by DTI Secretary Fred Pascual and First Circle General Manager and Head of Finance Rhys McCoy. Also in attendance were DTI Undersecretary Kim Bernardo-Lokin, DTI Undersecretary Blesila Lantayona, and Bureau of Small and Medium Enterprise Development (BSMED) Director Emma Asusano.

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From 2018 to 2023, First Circle has disbursed a total of ₱8.5 billion in business loans to over 3,450 businesses. 1,743 of these SMEs borrowed during the pandemic period — providing much-needed support during the harsh economic environment brought by the COVID-19, global supply chain issues, and inflation.

First Circle’s flagship product, now called the Business Credit Line, is a non-collateral business credit line with no setup or application fees. Clients only pay when they use the credit line. Today, SMEs can get up to ₱25 million in financing for as low as 0.79% monthly interest.

First Circle’s credit line is open even to newer businesses, so SMEs with a short operating history face fewer financial barriers. “Evaluating SMEs based on their operational age rather than merit will only push them to borrow from predatory lenders,” said First Circle Head of Acquisitions Alan Smyth at the time of the signing. Today, B2B businesses with at least ₱1 million in annual revenue can apply for a First Circle Business Credit Line regardless of how long they’ve been operating.

The partnership renewal is timely since the Regional Comprehensive Economic Partnership (RCEP) Agreement – a landmark agreement among 15 Asia-Pacific countries – came into force for the Philippines last June 2. Its preferential trading and investment agreements between member nations provides local SMEs unprecedented access to a combined market of 2.3 billion consumers by reducing tariffs and trade barriers on certain products and services.

“It opens up the door for our MSMEs to participate in a global setting," says DTI Undersecretary for Communications Kim B. Lokin. "Now, they will have the ability, the chance to showcase their products, goods, and services to a much wider range. We want to give our MSMEs a push to become global.” 

“RCEP opens up opportunities for our MSMEs to take advantage of a bigger market, explore a much expanded supply chain, and avail of new and better technologies to help innovate their business processes", adds DTI Undersecretary for Regional Operations Group (ROG) Blesila A. Lantayona. "DTI will intensify its information campaign in the regions and provinces through roadshows and dissemination of primers and other info materials to help MSMEs prepare for global opportunities. MSMEs need support in the areas of financing, market access, and on how to fully embrace the digital technology," Undersecretary Lantayona further says.

DTI is rolling out a series of countryside roadshows and primers in the next few months to prepare entrepreneurs for global opportunities. “There is really a need for us to push MSMEs in terms of financing, market access, and taking advantage of digital technology,” Undersecretary Lantayona further says.

Despite these empowerment activities, DTI admits that MSMEs’ first step to becoming global – finding financing – remains one of their biggest challenges. This is where First Circle pledged their assistance. 

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“With the renewal of our strategic partnership from 2023 to 2025, we can better support DTI’s efforts to enable SME participation in the global supply chain,” says First Circle General Manager and Head of Finance Rhys McCoy. “Beyond equipping entrepreneurs with sustainable financial resources, First Circle will ramp up its efforts to provide the financial literacy and business knowledge that SMEs need to navigate the complexities of the global economy.”

First Circle is a financing company regulated by the Securities and Exchange Commission (SEC) and an official DTI financing partner since 2018. For more information about the company, visit www.firstcircle.ph.

Credit approval, limits, and rates granted may vary upon assessment based on existing First Circle policies.