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THE
Philippine Export-Import Credit Agency, or Philexim, is
crumbling, and the Bangko Sentral has traced its fragile
financial health to poor internal controls.
Also known as the Trade and Investment
Development Corp. of the Philippines, or Tidcorp, the
BSP fears that its financial ratios are in worse shape
than what it reported last year, when it lost money,
industry sources said on Friday.
“Because of poor management, there are
doubts as to the value of its guarantee activities,”
sources said of Philexim, whose mission is to inspire
confidence in the credit and trade activities of
Philippine business.
Philexim guarantees the preshipment
receipts of exporters and provides sovereign guarantee
on foreign loans, among other activities.
But Philexim lost money last year just
as the economy was at its strongest in three decades,
making its performance all the more troubling for
everyone concerned, the sources said.
As a supervised entity, the BSP recently
conducted an audit and found that its debt-to-equity
ratio rose year-on-year to 10:90 as at end-September
2007 from 6:94 twelve months earlier.
The higher D-E ratio renders Philexim
more vulnerable to an economic downturn as it has more
liabilities in its books than it has equity.
Philexim’s return on equity (ROE) and
return on assets (ROA) were at negative one for the
period, respectively, from positive 4 percent and 3
percent.
This means significantly diminished
capacity to post profits given a measure of capital
investments and ability to generate the same for each
peso worth of assets in its books.
Finance Secretary Margarito Teves,
Philexim board chairman, swore in in January banker
Francisco Magsajo Jr. as president, replacing Virgilio
Angelo who is now chairman and chief operating officer
at the Small Business Guarantee and Finance Corp., an
agency under the Department of Trade and Industry.
Reports earlier cited that Philexim
posted a net loss of P14 million in the first nine
months last year, its first loss in 12 years.
Its revenues for the period totaled P141
million, or P53 million short of target, and P76 million
or 35-percent lower compared with the same period in
2006.
Philexim management at that time vowed
to make up for its poor performance and vowed to
generate P137 million in revenues in the final quarter
last year, a catch-up program that its board of
directors found hard to believe.
The board noted the catch-up plan was
even more ambitious than Philexim’s actual nine-month
revenue generation of only P93 million, and said it
should make no more than a third of its projection.
Philexim posted operating income of only
P16.3 million as compared with P76 million a year ago,
and this was on top of foreign-exchange losses of P24
million or 9-percent higher than the year-ago
foreign-exchange loss of P22 million.
As a result, its net loss totaled P14.1
million, a turnaround from year ago profits of P47.2
million. |
