PhilExim grants P25M credit line to exporters

Amid the difficulties faced by the small exporters due to peso appreciation and global softening of the market, the government-owned Philippine Export-Import Credit Facility (PhilExim) announced the release of the P25 million revolving credit line facility for the Cebu Gifts, Toys and Housewares Manufacturers Association, Inc. (Cebu-GTH)

About 400 sub-contractors of the Gifts Toys and Houseware (GTH) sector will be benefited from this amount, saving these sub-contractors from availing credits from loan sharks.

This is the first time that the PhilExim has extended this wholesale credit to an association, immediately after Cebu-GTH, another sector will get the same facility.

PhilExim president and chief executive officer Virgilio R. Angelo said that the move is the institution's response to the government's call for more accessible credit and financing opportunities to the SME sector.

Angelo hopes that the facility, apart from credit accessibility, will greatly reduce exporters' dependence on opportunistic financing that charge prohibitive rates, adding that the program feature of the facility is designed for exporters that may be SEC registered primary associations, federations, chambers, chapters of cooperatives.

PhilExim is one of the government financial institutions (GFIs), which is mandated to help and provide lending assistance to potential sectors like the exports, tourism, among others.

"No less than President Gloria Macapagal-Arroyo wanted credit availability to be reached by a greater number of our SME groups especially in the regional ares, where growth and development must begin," said Angelo.

He added that PhilExim hopes to have answered the government's call to assist the small and medium exporters, similar exporting associations, subcontractors and suppliers through more financing accessibility.

GTH-Cebu has 80 member companies every member has an average of five sub-contractor, said GTH-Cebu president Jenifer Cruz.

These subcontractors he said are micro-industry players that do not have capacity to avail of loan from the banks through the PhilExim support coursed through the GTH-Cebu organization these subcontractors will be able to expand their businesses.

Under the program, conduit associations can avail of a credit limit with a minimum of P1 million or a maximum of P25 million, with a single borrower's limit of P500,000 per end-borrower.

For GTH-Cebu, the organization will distribute the P25 million to each member company at a maximum amount of P500 thousand. The companies will then offer the money to their sub-contractors according to their financial requirements.

Early this week, the small exporters announced that some of them have to resort to streamlining manpower to cope with the difficult operational expense, brought about by strengthening of the peso, and declining demand abroad.