THE Finance department is considering the consolidation of state-owned guarantee firms with Philippine Export-Import Credit Agency (PhilEXIM), in order to streamline surety services.
PhilEXIM is an agency of the Department of Finance (DoF), providing credit, credit insurance and guarantee facilities primarily to export-oriented industries, including small and medium enterprises.
Some credit insurance firms which are government-owned and -controlled corporations (GOCCs) include the Small Business Corp., the Quedan & Rural Guarantee Corp. and the Home Guaranty Corp.
The plan however will have to be reviewed, and the DoF has not disclosed a timeline for its rollout.
In a statement, Finance Secretary Carlos G. Dominguez III said that the merger of these firms may be done through an executive order.
“We have a GOCC law so we can put them all in one organization and then just create a new one without necessarily going to Congress,” said Mr. Dominguez.
According to Republic Act 10149, the act which aims to promote the financial viability and fiscal discipline of state-run institutions, the Governance Commission for GOCCs (GCG) can “implement the reorganization, merger or streamlining of the GOCC, unless otherwise directed by the President.”
The GCG is a central advisory body for GOCCs, which evaluates their performance and determines their relevance, to ascertain whether they need to be reorganized, merged, streamlined, abolished or privatized.
According to National Treasurer Rosalia V. De Leon, PhilEXIM’s P500 million budget may be carried over to the enlarged credit institution.
However, the unitary credit corporation will need another P500 million fresh capital infusion to comply with central bank requirements.
Ms. De Leon added that the merger would have to separate mandates of the old PhilEXIM structure from the new agency.
She said the current PhilEXIM would mainly be a collecting agency in charge of handling the existing assets of the firm, while the new PhilEXIM would be a new corporation that would exclusively handle guarantee services.
Finance Undersecretary Grace Karen G. Singson of the Privatization Office said the state firms to be consolidated may face a reduction in their book value before the plan is carried out. — Elijah Joseph C. Tubayan
