Exporters, subcontractors get PhilExim financial aid

About 20 companies, mostly subcontractors of Gifts, Toys and Housewares (GTH) exporters have already benefited from the initial P5 million financial support from the state-owned Philippine Export-Import Credit Facility (PhilExim).

Cebu Gifts, Toys and Housewares Manufacturers Association, Inc. (Cebu-GTH) president Jenifer Cruz announced that the P5 million earlier released from PhilExim is part of the total P25 million revolving credit line facility to be loaned to the association to support the sub-contractors' capitalization requirement.

Another P5 million will soon be released by PhilExim in the next few months for the financial requirements of other subcontractor companies that are largely dependent on "loan sharks."

Cruz said the association has to agree with PhilExim to release the P25 million total credit revolving facility in tranches, the organization will know the flow of the service.

"We have to know first if this product will be well accepted by our subcontractors," he said, emphasizing that others are still used to lending to informal sector, that charge five percent to 10 percent.

Since this financial help came from the government-owned institution, Cruz said PhilExim and GTH are aiming to require at least 2.5 percent interest rate from the borrower.

About 400 sub-contractors of GTH sector is expected to benefit from the P25 million credit facility.

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 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.

GTH-Cebu will distribute the P25 million to each member company at a maximum amount of P500,000.

The companies will then offer the money to their sub-contractors according to their financial requirements.