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Gov’t-issued credit guarantees P216 billion after 2019 mergers

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THE national government’s total credit guarantee portfolio was P216 billion in 2019 after five agencies with guarantee functions consolidated into a single fund run by Philippine Guarantee Corp. (Philguarantee).

In a statement Friday, the Department of Finance (DoF) said this year Philguarantee will have an estimated P241 billion worth of guarantees in its porfolio this year, with P220 billion for the housing sector, P6 billion for agriculture and P15 billion for the corporate sector, including small and medium enterprises (SMEs).

In a report to Finance Secretary Carlos G. Dominguez III, Philguarantee said the consolidation last year pooled P55.5 billion worth of assets, with its equity and investment funds valued at P24.5 billion and P28 billion, respectively.

It collected P37.2 million worth of non-performing loans and sold off P291.76 million worth of non-performing assets

Philippine Export-Import Credit Agency (PhilEXIM) merged in 2019 with the Home Guaranty Corp. 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 were also transferred to PhilEXIM, which is now called Philguarantee.

An Executive Order issued by President Rodrigo R. Duterte in 2018 which became effective in Aug. 31, 2019, required government-run guarantee firms to merge and transfer their functions and assets to a single entity.




Philguarantee said it hopes to widen credit guarantee support to “priority sectors of manufacturing, export, infrastructure, renewable energy and energy efficiency projects and commercial agriculture projects; as well as to SMEs; low-cost, socialized and medium-cost housing developers; and small farmers and fisherfolk.”

Philguarantee President Alberto E. Pascual said the company has been granting credit guarantee facilities to lending institutions such as universal, commercial, savings and rural banks, and cooperatives, non-government organizations and associations of farmers.

“We also expect additional credit guarantees 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 and the transfer of P800 million from the Electric Cooperative-Partial Credit Guarantee Program from the LGU Guarantee Corp. (LGUGC),” Philguarantee said in the report.

Among its priorities this year are to continue implementing the post-merger process initiatives and projects, to resolve and dispose of major non-performing assets and settle outstanding payables, and improve risk management. — Beatrice M. Laforga









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