Philexim eyes more loans, guarantees to SMEs

State-run Philippine Export-Import Credit Agency (Philexim), an attached agency of the Finance department, is eyeing to increase to P1 billion by the end of 2009 the amount of loans and guarantees extended to micro, small and medium enterprises.

Philexim president Francisco Magsajo Jr. said the move is part of efforts to pump-prime the economy and help cushion the impact of the global financial crisis on the country’s export sector.

He said the sector hardest hit by the financial meltdown in the United States is the export sector, given that the US is the country’s number one trading partner.

“The threat to the export sector is really the slowdown so we want to bring down their cost of borrowing,” Magsajo said.

As such, the agency is eyeing to increase by P500 million to P750 million for this year the amount of loans and guarantees given to these SMEs that are mostly in the export business. Originally, it allocated a budget of P250 million for lending and guarantees this year.

“By the end of 2009, we want to increase this to P1 billion,” he told reporters.

These loans are extended to exporters through various direct lending programs. Exporters use the loans to purchase equipment, purchase inventories or expand their working capital and to build or expand their facilities.

Last year, Philexim was able to provide P150 million as loans to exporters. As of end-September, direct lending availments from the agency amounted to P116 million. Sectors on the priority list of Philexim in terms of guarantees are those under the government’s Investment Priorities Plan.

These sectors include tourism, business process outsourcing, information and communications technology, mining and the manufacturing sector.

From January to September this year, Philexim generated a net income of P58.76 million or 113 percent more than the projected net income of P27.6 million under its 2008 business plan.

Philexim, a government-owned and controlled corporation, is tasked to help Philippine exporters gain access to international markets and become globally competitive. Established in 1977, it is also known as the Trade and Investment Development Corp. of the Philippines (TIDCorp).