PHILEXIM enters 40 years of stimulating economic development
Everyday, there is a steady stream of Koreans and other nationalities checking in at Widus Hotel and Casino inside Clark Special Economic Zone in Angeles City, Pampanga. Being the youngest and most luxurious Deluxe Class hotel accredited by the Department of Tourism in the area, it has grown very popular among local and foreign business people because of its accommodations, ideal location, reasonable room rates and modern Asian designs.
Korean businessman Daesik Han, president and CEO of Widus International Leisure, Inc. (WILI), opened the hotel in 2008 using P300- million financed by the Philippine Veterans Bank with the guarantee provided by the Philippine Export- Import Credit Agency ( PhilEXIM), the government’s sole loan guarantee provider for strategic projects.
With PhilEXIM’s assistance, it was able to complete its two-tower, 233-room hotel, which employs around 600 local workers in various hotel and restaurant jobs. Moreover, around 500 laborers were employed during the hotel’s construction.
Today, WILI is the fastest-growing hospitality and entertainment company inside Clark Freeport Zone, with plans to construct another P60- million hotel project together with Renaissance Hotels International Corp. Ltd., the group behind the Marriott brand of hotels.
Facilitating growth, investment
PhilEXIM plays a crucial role in the country’s economic development. It stimulates, increases and develops the export of goods and services, and facilitates investment in strategic sectors for the country’s development by extending guarantees, insurance, credit and related technical assistance services to viable enterprises, particularly small and mediumsize enterprises (SMEs).
It was founded on Jan. 31, 1977 as the Philippine Export and Foreign Loan Guarantee Corporation (PhilGuarantee) through a decree by then- President Ferdinand Marcos. In 1998, under the administration of President Fidel Ramos, its mandate was expanded and was thus renamed as Trade and Investment Development Corporation of the Philippines ( TIDCORP). Under then- President Gloria Macapagal-Arroyo, it was designated as the country’s official export import credit agency.
Since its establishment 40 years ago, PhilEXIM has helped numerous SMEs, as well as multinational corporations, in their bid to export their goods and services globally as well as expand their business footprint in the Philippines. PhilEXIM understands that expanding one’s business entails plenty of financial risks and so it helps companies minimize such risks by providing guarantees, insurances and direct lending.
A helping hand to SMEs
Take the case of Lorna Gullem-Andrino, owner and proprietor of Yola Farm in Barangay Bulasa, Argao, Cebu. After 16 years as an overseas Filipino worker (OFW) in Japan, Andrino and her husband started a poultry-raising business in 2006 that supplies broiler chickens to San Miguel Foods, Inc. (SMFI). Back then, their business made use of the conventional poultry building with a capacity of 10,000 birds.
In 2010, SMFI advised the couple to adopt the company’s modernized poultry building technology so that it can be at par with SMFI’s modernization program and continue supplying chickens to the company. The construction of the CCS-Tunnel Ventilated Poultry Building was to be funded by a loan from the Bank of Commerce, an SMFI subsidiary bank, but was discontinued.
Adamant in pursuing the project, the couple approached PhilEXIM in March 2014 for possible financing. They have already spent P4 million on construction and another P2 million for the purchase of the land. By September of the same year, PhilEXIM approved the couple’s loan of P20 million to complete the poultry building.
In 2015, the two-story Yola Farm poultry building became operational. Today, the facility is on its 10th harvest, with an average satisfactory performance of 97-percent harvest recovery, above SMFI’s standard of 95 percent. The project was able to generate employment for 10 regular employees and 25 seasonal laborers in charge of cleaning and disinfection activities after each harvest cycle. During the construction, a total of 100 laborers from Barangay Bulasa were employed for seven months.
Upon completion, the farm has provided revenues to the local and national government through tax payments and other dues. The project has also promoted sustainable farming in the community, as the poultry farm provides free chicken dung to nearby farmers for use as soil conditioner. The poultry farm continues to provide SMFI with export-quality broilers.
Spurring industrial development
PhilEXIM’s financial assistance does not just extend to the service and agricultural sectors. Even the industrial sector is reaping the benefits of PhilEXIM’s credit, insurance and guarantee activities. One example is that of Steel Asia Manufacturing Corp., a company at the forefront of reviving the country’s steelmaking industry.
PhilEXIM was among the key forces behind the successful establishment of the country’s most modern steel mill to date, SteelAsia’s rolling mill facility in Davao City. The agency served as the guarantor for the project loan from Standard Chartered Bank worth $49.9 million. SteelAsia has fully paid the loan in December 2016. With PhilExim’s backing, SteelAsia has upped its production to its current 1.9 million tons from only 280,000 tons in 2007.
Because of the agency’s support, SteelAsia has grown into the industry leader that it is today, with steel mills all over the country contributing to job generation, spurring SME growth, providing returning OFWs with stable employment and supplying the market with quality rebar at Manila prices anywhere in the country.
The compnay now proactively pushes the country’s industrialization efforts, aligning its goals with the development of a worldclass Philippine steel industry, particularly in standards and fair play, best management practices, transparency and governance as well as technology.
Continuing a 40-year legacy
Through PhilEXIM’s credit, insurance and guarantee activities, local companies can have access to needed capital to expand their business, and in the process, generate jobs for the local community, boost economic activity in their locality and promote Philippinemade products to the world market. In return, it contributes to the National Treasury through taxes and licensing fees collected from approved transactions. In 2015 alone, PhilEXIM supported 228 various industries as well as contributed to the generation of 12,109 jobs, and created export revenues totaling $63.67 million.
With the change in government last July 2016, PhilEXIM plans to continue helping more SMEs and other viable industries secure their needed credit, insurance and guarantees, enabling them to grow their business with decreased risks. As the Duterte Administration’s thrust is in rural development, the agency is looking forward to further its assistance so it can reach the smallest of entrepreneurs in the farthest corners of the country.
It will also work vigorously to maintain its financial viability by making its processes even more efficient, so much so that in six year’s time, it would have realized a great deal of the new administration’s vision. Such is the legacy that PhilEXIM has made in the past 40 years — a legacy that it hopes to continue for many years onward.