The Department of Finance (DoF) is eyeing to create a single entity that would fund a new government guarantee system by merging the Philippine Export-Import Credit Agency (PhilExim) and other state-run guarantee firms.
In a statement on Monday, Finance Secretary Carlos Dominguez 3rd said consolidating PhilExim with other state guarantee firms such as the Small Business Corp., Quedan & Rural Guarantee Corp., and the Home Guaranty Corp. could be done through an executive order based on Republic Act (RA) 10149 or the government-owned and controlled-corporations (GOCCs) Law.
While RA 10149 aims to promote financial viability and fiscal discipline of GOCCs, the Governance Commission for GOCCs (GCG) can carry out the reorganization, merger or streamlining of state-controlled firms.
“We have a GOCC law, so we can put them all in one organization and then just create a new one without necessarily going to Congress,” Dominguez noted.
Under the law, the GCG can also recommend to the President the abolition or privatization of GOCCs.
An attached agency of the DoF, PhilExim provides export-oriented industries, including small and medium enterprises with credit, credit insurance and guarantee facilities.
Dominguez directed other officials to draw up a plan on how to carry out the proposed merger.
Finance Undersecretaries Antonette Tionko, who heads the Corporate Affairs Group; Bayani Agabin, who is in charge of legal services;; and
National Treasurer Rosalia de Leon recommended that the old PhilExim be mainly a collecting agency in charge of handling its own existing assets. The new PhilExim would then exclusively handle guarantee services.
The P500 million budget of the existing PhilExim would be assigned to the new corporation, but another P500 million would be needed as fresh capital to meet the Bangko Sentral requirements and enable the new PhilExim to grow, De Leon said.
Karen Singson, who heads the Privatization Office, said that GOCCs involved in the plan would have to take a “write down”—or a reduction in the book value of their respective assets—before the consolidation can take place.