DOF hastens Philexim merger

THE Department of Finance (DOF) has committed to speed up the consolidation of the Philippine Export-Import Credit Agency (Philexim) with other state-run guarantee firms and programs in compliance with President Duterte’s directive to merge them into a single corporate entity.

Finance Secretary Carlos Dominguez III said the presidential directive outlined in Executive Order No. 58 will be implemented by the DOF in coordination with the Land Bank of the Philippines (LandBank), Development Bank of the Philippines (DBP), Department of Agriculture (DA), Housing and Urban Development Coordinating Council (HUDCC) and the Department of Trade and Industry (DTI).

Under EO 58, the President directed the DOF to carry out the the merger of Philexim and the Home Guaranty Corporation (HGC); the transfer to the Philexim of the guarantee functions, programs and funds of the Small Business Corporation (SBC); and the transfer to Philexim of the administration of the Agricultural Guarantee Fund Pool (AGFP) and the Industrial Guarantee and Loan Fund (IGLF).

All these state guarantee firms and funding programs will be consolidated into a single entity-the Philexim--that will be renamed the Philippine Guarantee Corporation (PhilGuarantee).

With the consolidation, the Philexim’s authorized capital stock will be increased from P10 billion to P50 billion and the equity contributions of the National Government to the HGC, IGLF and AGFP will be transferred to the Philexim to form part of its paid-up capital.

Any balance in the required paid-up capital, subject to the DOF’s prior coordination with the Department of Budget and Management (DBM), will be charged as capital infusion from the National Government to be sourced from the annual General Appropriations Act (GAA).

To clean up Philexim’s balance sheet through the spin-off of its nonperforming assets and outstanding loans, the President also directed that the firm be authorized to establish its own subsidiary corporation functioning as board of liquidators “to manage its non-performing assets, collect its receivables, recover and dispose of its acquired assets, manage and settle its outstanding loans and administer its default contingent accounts.”

“The merger of the HGC and Philexim, with the Philexim as the surviving entity, and the transfer of the guarantee functions, funds and programs of the SBC, and the administration of the AGFP and IGLF to the Philexim, are in accordance with the goal of ensuring sound macroeconomic policy through fiscal, monetary and trade policies that will work towards stability, inclusivity, competitiveness and resiliency of the economy under the Philippine Development Plan 2017-2022,” the EO stated. DOF