State guarantees reach ₱216 B in 2019

Published February 29, 2020, 12:00 AM

by manilabulletin_admin


The government’s total credit guarantee portfolio reached ₱216 billion last year following the consolidation of the finances of five state agencies performing guarantee functions into a single fund under the Philippine Guarantee Corp. (Philguarantee).

This consolidation of the state’s guarantee funds was the result of the merger of the Philippine Export-Import Credit Agency (PhilEXIM) with the Home Guaranty Corp.; plus the transfer to PhilEXIM of the guarantee functions, programs and funds of the Small Business Corp. (SB Corp.) and the administration of the Agricultural Guarantee Fund Pool and the Industrial Guarantee and Loan Fund.

PhilEXIM was then renamed as Philguarantee last year.

Executive Order (EO) No. 58 issued by President Duterte in 2018, mandated the merger and transfer of functions and assets of these guarantee firms into a single entity — Philguarantee — which became effective in August last year.

The Department of Finance (DOF) was the agency tasked to implement the EO. Dominguez chairs the board of Philguarantee.

In its report to Finance Secretary Carlos Dominguez III, Philguarantee said the consolidation resulted to total assets of the firm reaching ₱55.5 billion, its equity amounting to ₱24.5 billion, and investment funds totaling ₱28 billion in 2019.

The state guarantee firm also collected and recovered ₱37.2 million worth of non-performing loans and sold ₱291.76 million of its non-performing assets in 2019.

For this year, Philguarantee plans to expand its credit guaranty support to the priority sectors of manufacturing, export, infrastructure, renewable energy and energy efficiency projects and commercial agriculture projects; as well as to small and medium enterprises (SMEs); low-cost, socialized and medium-cost housing developers; and small farmers and fisherfolk.

“To achieve the expansion of credit guaranty support to these priority sectors, Philguarantee has been granting loan portfolio credit guarantee facilities to various lending institutions. These include several universal, commercial, savings and rural banks as well as cooperatives, non-government organizations (NGOs) and farmers’ associations,” Alberto Pascual, Philguarantee president said.

Its total guaranty portfolio for 2020 is estimated to amount to ₱241 billion, with ₱220 billion in the housing sector, ₱6 billion from agriculture and ₱15 billion from the corporate sector, including SMEs.

“We also expect additional credit guarantee portfolio to be generated in 2020 with the designation of PhilGuarantee as program administrator for the World Bank’s Clean Energy Fund/Philippine Renewal Energy Development Project (CEF-PHRED) and the transfer of ₱800 million of the Electric Cooperative-Partial Credit Guarantee (EC-PCG) Program from the LGU Guarantee Corp. (LGUGC),” Philguarantee said in its report to Dominguez.

Philguarantee committed to sustain and generate more revenues in 2o20 from guaranty fees and premiums, commitment fees and the sales and/or rental of real estate assets.

Its 2020 priority thrusts also include the following: Continuing the implementation of post-merger process initiatives and projects through a unified financial accounting system and central liability system; resolving and disposing of big-ticket non-performing assets and settling of outstanding guaranty payables; and strengthening the implementation of its risk management function.

This year, Philguarantee said it would also focus on good governance compliance; set up a unified guarantee organization; develop its human capital through re-training, upskilling and retooling of employees and hiring of new ones; improve cooperation with its local, regional and ASEAN counterparts; and strictly comply with regulations covering procurement and use of the corporate operating budget.