State-run Philippine Export-Import Credit Agency (Philexim), an attached agency of the Finance Department, plans to issue P1.4 billion worth of bonds to raise funds for its capitalization, its top official said yesterday.
Philexim president Francisco Magsajo Jr. said the agency would be raising P1.4 billion in Tier 2 capital before the end of the year.
“We’re waiting for the approvals. Hopefully, we can do it by the end of the year,” he told reporters yesterday.
Magsajo said Philexim is already seeking the approval of the Finance Department and the Bangko Sentral ng Pilipinas (BSP) for the planned bond issuance.
Raising P1.4 billion in Tier 2 capital through the issuance of bonds would increase the agency’s capital adequacy ratio (CAR) to 18 percent from the current ratio of 11 percent, Magsajo said.
The CAR is the ratio of a bank’s capital to its risk.
Tier 2 capital is a measure of a bank’s financial strength. It is a term used to describe the capital adequacy of a bank.
The Philexim chief said proceeds of the bond issuance would be used to finance the lending activities of the agency.
Sectors on the priority list of Philexim in terms of guarantees are those under the government’s Investment Priorities Plan.
These sectors include tourism, business process outsourcing, information and communications technology, mining and the manufacturing sector.
From January to September this year, Philexim generated a net income of P58.76 million or more than double the projected net income of P27.6 million under its 2008 Business Plan.
The agency has so far issued P2.56 billion in guarantees as of end-September 2008. – Iris Gonzales