Two years following its merger as instructed by President Duterte, state-run firm Philippine Guarantee Corporation (PHILGUARANTEE) trailblazed in its performance during the second year of the pandemic, with net income posted at P1.37 billion in 2021, up by 182 percent from P487 million registered in 2020, according to a report to Finance Secretary Carlos Dominguez III.

PHILGUARANTEE President and CEO Alberto Pascual reported that based on initial financial reports, the nearly two-fold increase in the Corporation’s net income was the result of improving cost-to-income outcomes from P1.16 billion in 2020 to P850 million in 2021.

Pascual said the Corporation’s income from loan guarantees in 2021 amounted to P1.59 billion, slightly lower by 2 percent from P1.62 billion in 2020, but its non-guarantee income generated from investments and other income rose 176 percent to P2.32 billion in 2021 from P839.6 million year-over-year. As of December 31, 2021, the Corporation’s outstanding guarantee portfolio registered P182.9 Billion, which was 44 percent better than the P130.8 billion level in 2015, a year before the Duterte Administration took office.

As a result of fulfilling its mandate towards the priority sectors, Pascual also reported that for 2021, the Corporation assisted more beneficiaries than in 2020, up by 6.5 per cent, with a total of 202,269 micro, small and medium entrepreneurs, housing borrowers, and agri-based workers (farmers and fisherfolk). PHILGUARANTEE also partnered with an aggregate 128 banks and other financial institutions for the various credit guarantee facilities.

PHILGUARANTEE is the principal Agency for state guarantee finance of the Philippines. Its mandate is to make available the provision of credit guarantees to priority areas such as the housing, micro, small and medium enterprises (MSMEs) and agriculture sectors, as well as other industries considered as government priorities. Sources of guarantee income were guarantee fees from loans for MSMEs and the agriculture sector; guarantee premiums from housing loans; and application, service and commitment fees.

The Corporation’s income before taxes, after deducting provisions for losses and operating expenses was P1.85 billion in 2021 and P716.6 million in 2020. Pascual also added that in terms of comprehensive income, PHILGUARANTEE achieved P1.13 billion in 2021, up by 111 percent from P537 million in 2020.

Pascual also said the Corporation’s assets grew 6 percent from P57.41 billion in 2020 to P60.88 billion last year, and its liabilities declined by 9 percent from P37.83 billion in 2020 to P34.32 billion in 2021.

The firm’s total equity increased by 36 percent, from P19.57 billion in 2020 to P26.56 billion last year.

PHILGUARANTEE is currently disposing its big-ticket assets located in the cities of Manila, Quezon, and Mandaluyong to generate an additional P7.33 billion in income this year, Pascual said.

For 2022, Pascual explained that PHILGUARANTEE is projecting to grow its portfolio, backed by its commitment to support the MSMEs, housing borrowers, agri-based workers and other priority sectors.

The Corporation, he said is also enhancing its service delivery thrusts by implementing digital modernization programs in Debt Management and Financial Analysis, and Loan Guarantee Management.

Dominguez lauded Pascual and the management for PHILGUARANTEE’s continued compliance on International Organization for Standardization (ISO) standards, having re-acquired its ISO 9001 and 27001 Certificates from TUV Rheinland last year.

Before the Duterte administration took over, the government’s loan guarantee functions were spread across different agencies.

Upon Dominguez’s recommendation, President Duterte issued in 2018 Executive Order No. 58, merging the functions of agencies performing loan guarantee functions into one corporation—PhilGuarantee–to efficiently monitor and utilize government resources in these guarantee mechanisms.

Under the EO, the President approved the merger of the Home Guaranty Corp (HGC) with the Philippine Export-Import Credit Agency (PhilExim); transferred the guarantee functions, programs and funds of the Small Business Corporation, and the administration of the Agricultural Guarantee Fund Pool (AGFP ) and the Industrial Guarantee and Loan Fund to PhilExim.

PhilExim was renamed as the Philippine Guarantee Corporation.

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