Duterte okays merger of PhilExim with other guarantee firms

MANILA President Rodrigo Duterte has approved the merger of the Philippine Export-Import Credit Agency (PhilExim) with other state-run guarantee corporations particularly the Home Guarantee Corporation (HGC).

In his Executive Order 58 signed on July 23, Duterte has also transferred the guarantee functions, programs and funds of the Small Business Corporation (SBC) and the administration of the Agricultural Guarantee Fund Pool (AGFP) and the Industrial Guarantee and Loan Fund (IGLF) to the PhilExim.

On the other hand, the PhilExim, which is an attached government corporation of the Department of Finance (DOF), will be renamed as the Philippine Guarantee Corporation or PhilGuarantee.

Under Republic Act 10149, the Governance Commission for government-owned and controlled-corporations or GOCCs can carry out the reorganization, merger or streamlining of state-controlled firms.

Also known as the GOCC Governance Act of 2011, the government should recognize the potential of the GOCCs as significant tools for economic development.

As of July 2018, the remittances of 51 of the 77 GOCCs reached Php31.297 billion, sixty-four percent higher than last year's Php19.1 billion of the same period.

Under the law, the Governance Commission for GOCCs (GCG) can also recommend to the President the abolition or privatization of GOCCs.

Created under Presidential Decree 1080 in 1977, PhilExim provides guarantees to promote and facilitate the entry of foreign loans into the country for development purposes.

PGC, meanwhile, guarantees the payment of any and all forms of mortgages, loans and other forms of credit facilities and receivables arising from financial contracts exclusively for residential purposes and the necessary support facilities.

The functions of the SBC that will be transferred to PhilExim is the implementation of comprehensive policies and programs to assist Micro, Small and Medium Enterprises (MSMEs) in all areas including, but not limited to, finance and information services, training and marketing.

The AGFP, presently under the supervision of the Department of Agriculture, is intended to mitigate the risks involved in agriculture lending while IGLF is a relending and guarantee program established in 1952.

Duterte approved the merger and transfer of guarantee functions to the PhiExim to ensure sound macroeconomic policy through fiscal, monetary and trade policies that will work towards stability, inclusivity, competitiveness and resiliency of the economy under the Philippine Development Plan 2017-2022.

Under E.O. 58, the authorized capital stock of the PhilExim will be increased from Php10 billion to Php50 billion while the equity contributions of the national government to the HGC, IGLF and AGFP will be transferred to the PhilExim to form part of its paid-up capital.

All qualified officers and employees affected by the merger may avail of the separation pay. (PNA)

Source: Philippine News Agency