The Philippine MSMEs represent 99.6% of all businesses and employ two-thirds of the workforce, yet their contribution to value-added remains modest, reflecting untapped potential for inclusive and sustainable growth. Despite their scale and economic relevance, access to finance remains a major bottleneck. MSME loans accounted for only 4.1% of total bank lending in 2023, down from 6.1% in 2019, with barriers ranging from high perceived credit risk and weak collateral systems to limited financial documentation, especially among micro-enterprises.
At the same time, MSMEs in the Philippines face some of the highest electricity costs in Southeast Asia and frequent power outages, which impact productivity and competitiveness. The clean energy transition offers a significant opportunity for Filipino MSMEs to lower their operational costs, improve energy security and build resilience, whether through energy efficiency measures or distributed renewable energy systems.
Targeted policies such as the National Energy Efficiency and Conservation Plan, the Missionary Electrification Development Plan, the Green Energy Option Program, and net metering are creating an enabling environment, but uptake remains low due to high upfront costs, limited awareness, and a lack of tailored green financial products. On the supply side, many financial institutions remain cautious in serving the MSME green segment, citing risk perception and capacity gaps, even as regional examples demonstrate that well-structured MSME lending can be both viable and profitable.
The OECD Clean Energy Finance and Investment Mobilisation (CEFIM) programme, in collaboration with the Bangko Sentral ng Pilipinas (BSP), has launched a new initiative on “Enhancing access to finance for clean energy for MSMEs in the Philippines”. The project aims to strengthen the ecosystem for MSMEs to access to clean energy finance through market research, regulatory analysis, and targeted capacity building.
