BRITISH lender Standard Chartered Bank is tapping the lending and deposit market of small and medium enterprises, or SMEs, as the sector makes a “big contribution” to the economy.

The SME market, in this case, comprises 99.6 percent of the country’s businesses and 69 percent of the labor force.

The bank yesterday launched its SME banking business which consists of deposit accounts; cash management, account management and trade services; and investment and financing products.

Standard Chartered president and chief executive officer Eugene Ellis said that despite the expected economic slowdown, SME banking will serve as the umbrella of consumer banking because of its role in the economy.

“SMEs in the Philippines are more than 90 percent [of the country’s businesses]. If they don’t grow, the economy will not grow. There will always be SMEs,” he said in an interview with the BusinessMirror after the launching.

Because of soaring inflation, SMEs are expected to need additional working capital, he said.

“Any slowdown on growth means a slowdown on working capital,” he said.

Central bank Governor Amando Tetangco Jr. in his keynote speech during the launch said that as of December 2007, loans to SMEs totaled P352 billion, “significantly” higher than the P17 billion first lent to the industry in 1991. The sector accounts for 32 percent of the gross domestic product.

In a phone interview, Paula Felipe, Standard Chartered general manager for SME banking, said the new business will be the priority of the bank’s consumer banking segment.

“It [SME] is one of our traditional markets. SME as a group is a priority under consumer banking. The SME segment here is a big contribution to the economy, so we [will] provide this opportunity,” she said.

The bank remains positive on retail trade and the construction industry that it estimates to have grown around 28 percent and 19 percent, respectively.

The flagship product of SME banking is the Business Saver, a peso checking account that promises to deliver five times the interest rates that other banks offer.

THE GOVERNMENT may have had enough of accredited government securities dealers that, for the past five months, have displayed a stingy attitude when it comes to their money.

PRICES of goods and services in the Philippines have entered a “turbulent” level and inflation will likely spike up to nine percent before pulling back within the 4-percent to 4.5-percent range.

THE peso closed little changed yesterday on prevailing oil and inflation concerns, currency traders said.

BRITISH lender Standard Chartered Bank is tapping the lending and deposit market of small and medium enterprises, or SMEs, as the sector makes a “big contribution” to the economy.

IF the forecast by Standard Chartered Bank on inflation this year is any indication, prices—not growth—preoccupy the banks’ minds the most.