"It is a different class, and it could lead to savings," Edeza said. Prior to his new assignment, Edeza was the country’s national treasurer.
Last week, Mina C. Figueroa was sworn in as the new national treasurer replacing Edeza, who took over the post vacated by Joel C. Valdes.
PhilExim is the only government operated or controlled corporation (GOCC) that has a sovereign guarantee. It is a line agency of the Department of Finance (DOF).
"Banks should take a serious look at the advantages of utilizing PhilExim’s sovereign guarantee as it is a different class," Edeza explained. "It can likewise result in huge savings for banks since a guarantee call is equivalent to cash."
Exporters can tap loans from commercial banks using PhilExim’s sovereign guarantee.
Edeza explained that banks could lower their interest rates on an exporter’s loans, resulting in higher lending and better national earnings.
At the same time, they could be protected by the guarantee instead of ending up with huge non-performing loans (NPLs).
However, the former national treasurer warned that PhilExim would be very cautious in issuing guarantees to exporters and importers.
He said the guarantees would be studied carefully to ensure that it does not impact on the national debt position of the government.
"We have learned from the 1997 Asian crisis, and what it did to the national economy and the private corporations with huge foreign debts with sovereign guarantees," Edeza said.