YOKOHAMA, JAPAN—The government is looking at folding into one big body all the state-run corporations providing guarantees, Finance Secretary Carlos G. Dominguez III said Thursday.
“We have so many guarantee operations, right? So why don’t we just put it under one big one? We have PhilEXIM (Philippine Export-Import Credit Agency) and in fact it has exceeded its mandate—they actually give loans. Then you have the Small Business Guarantee and Finance Corp., then you also have Quedancor (Quedan and Rural Credit Guarantee Corp.). Why don’t we just put it all in one? They have essentially the same function, just different products,” Dominguez told reporters on the sidelines of the Asian Development Bank’s 50th annual meeting.
Guarantee corporations guard customers or investors against financial losses.
Hence, Dominguez said all of the government’s guarantee operations “technically were losing” money.
“PhilEXIM is really under water so I don’t see putting more money in there,” Dominguez said.
According to the Department of Finance website, the DOF-attached PhilEXIM was tasked to “stimulate, increase and develop the export of goods and services, and to facilitate investment in strategic sectors for the country’s development by extending guarantees, insurance, credit and related technical assistance services to viable enterprises.”
“Why not take this opportunity to consolidate and have one good, big, well-financed, well-managed, well-regulated guarantee board or organization?” Dominguez said.
According to Dominguez, the Department of Finance is already studying such a move, and has sought the opinion of the Bangko Sentral ng Pilipinas and the Governance Commission for Government Owned or Controlled Corporations.
Under one guarantee board or organization, fund raising through bond issuances can be easier, Dominguez said. “If you have one big solid one, you’re better off financially instead of having a lot of small ones.”