Government sees double-digit growth in guarantee portfolio to P240 billion

MANILA, Philippines — The government sees a double-digit growth of 11.1 percent in guarantee portfolio to P240 billion this year from P216 billion last year through the expansion of covered sectors, according to the state-run Philippine Guarantee Corp. (Philguarantee).

Philguarantee president Alberto Pascual said the bulk or P220 billion would go to the housing sector followed by the corporate sector including small and medium enterprises (SMEs) with P15 billion, and the agriculture sector with P6 billion.

Pascual said the agency plans to expand its credit guaranty support to the priority sectors including manufacturing, export, infrastructure, renewable energy and energy efficiency projects as well as commercial agriculture projects.

He said Philguarantee would also extend support to SMEs, low-cost, socialized and medium-cost housing developers as well as small farmers and fisherfolk.

“To achieve the expansion of credit guaranty support to these priority sectors, Philguarantee has been granting loan portfolio credit guarantee facilities to various lending institutions. These include several universal, commercial, savings and rural banks as well as cooperatives, non-government organizations and farmers’ associations,” he said.

In a report to Finance Secretary Carlos Dominguez, Pascual said the agency expects additional credit guarantee portfolio after it was designated as program administrator for the World Bank’s clean energy fund/Philippine renewal energy development project and the transfer of P800 million of the electric cooperative-partial credit guarantee program from the LGU Guarantee Corp. (LGUGC).

Philguarantee committed to sustain and generate more revenues this year from guaranty fees and premiums, commitment fees as well as sales and rental of real estate assets.

For this year, Pascual told Dominguez the agency would continue the implementation of post-merger process initiatives and projects through a unified financial accounting system and central liability system and at the same time resolve and dispose big-ticket non-performing assets and settle outstanding guaranty payables.

The agency, he said, would also focus on good governance compliance, set up a unified guarantee organization; develop its human capital through re-training, upskilling and retooling of employees and hiring of new ones, improve cooperation with its local, regional and ASEAN counterparts, and strictly comply with regulations covering procurement and use of the corporate operating budget.

The agency’s total credit guarantee portfolio reached P216 billion last year following the consolidation of the finances of five state agencies performing guarantee functions into a single fund.

This consolidation of the state’s guarantee funds was the result of the merger of the Philippine Export-Import Credit Agency (PhilEXIM) with the Home Guaranty Corp. plus the transfer to PhilEXIM of 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.

President Duterte issued Executive Order 58 in 2018 mandating the merger and transfer of functions and assets of these guarantee firms into Philguarantee.

The consolidation resulted to total assets of the firm reaching P55.5 billion, its equity amounting to P24.5 billion, and investment funds totaling P28 billion in 2019.