MANILA, Philippines — State-owned Philippine Export-Import Credit Agency (Philexim) would likely miss the guarantee business’ growth target of 64 percent this year due to slower economic output and delays in public-private partnership (PPP) initiative.

Francisco S. Magsajo Jr., Philexim president and chief executive said in an interview with reporters that the country's sovereign guarantor may fail to hit the guarantee business growth target of P23 billion this year.

But Magsajo said that as of October this year, Philexim’s outstanding loans to clients reached P18 billion, already higher by 28 percent compared with only P14 billion for the entire 2010.

“There was slowdown in orders abroad of locally manufactured products, even investors that would have poured in additional or new capital, we saw some slowdown also,” Magsajo said.

“But overall the growth pace was still good despite the slowdown,” he added.

After the lower than expected loan expansion this year, Magsajo is optimistic that 2012 would be a much better year for Philexim as the country’s gross domestic product (GDP) growth is expected to recover.

“With GDP growth target of 5.5 percent to 6.5 percent next year, we’re looking at five-times that much growth from our portfolio, say 30 percent growth over this year for our loan exposure,” he said.

Magsajo expects that Euro zone problem would still persist until next year but remains optimistic that the Asian and other non-traditional markets would remain drivers of global growth.

“The huge chunk of our exposure is in metals and power. For metals, these are more on China and Japan, while power is skewed towards renewable energy, particularly those for communities with sizes of three to five megawatts, basically hydro,” Magsajo said.

He earlier said that there were also several projects in tourism, mining, food production, bulk water, among others that were in the pipeline.

The guarantee given by Philexim could help mitigate creditor bank’s risk and at the same time enhances the bank’s collateral position. All guarantee obligations of Philexim carry the full faith and credit of the Republic of the Philippines and carry zero risk weight based on a circular issued by the Bangko Sentral ng Pilipinas (BSP).

Philexim, established through Executive Order 85 issued on March 18, 2002, is also mandated to provide insurance cover and other services to facilitate the export of Philippine goods and to enter into contract for re-insurance with any recognized export credit agency or insurance organization.