THE Philippine Export Import Credit Agency counts on stabilizing interest rates over the near term for elbowroom to raise as much as P3 billion in subordinated debt by the third quarter.

                The agency, also known as Philexim, reported a net loss of P17 million in 2007 and needs fresh funds to undertake expanded guarantee activities and direct lending to turn around its results and post profits this year of around P18 million.

                Philexim president Francisco Magsajo Jr. told reporters they could report more profits if not for the commitment to set aside at least P50 million of forecast earnings as general provisioning.

                Regulation requires banks and financial institutions to provide buffer funds for assets exposed to different levels of risks.

                When Philexim lost money last year, it also had to set aside P19 million for provisioning.

                Magsajo said they have set aside the bulk of their guarantee portfolio under an omnibus guarantee program for triple-A or top-tier corporations.

                His optimism for banner performance this year is based on the fact that a Philexim-guaranteed transaction is zero-risk weighted under rules by the Bangko Sentral ng Pilipinas and should therefore be attractive.

                “Local assets carry 100-percent risk weight, but with Philexim guarantee those are immediately exempt from the single-borrower limit,” Magsajo said.

                He plans to focus the year’s guarantee operations on activities with IPP content such as tourism-related investments, infrastructure buildup, telecommunications and the like.

                IPP, or Investment Priorities Plan, activities are investment activities that  are considered critical to sustainable and long-term growth.

                Magsajo would not reveal the identities of companies seeking Philexim guarantee, but said five or six of them in the pipeline were considered triple- A or prime-rated companies.

                He said Philexim has excess guarantee capacity of some P9 billion at the moment. The amount is expected to shoot up to P15 billion to P17 billion by year’s end.

                “Last year we had P6 billion, so we’re basically doubling capacity this year,” Magsajo said.

                According to him, Philexim has tangible capital of P1.4 billion at the moment.

                The government is set to infuse another P500 million within the year, plus proceeds from the Tier-2 capital issuance that should lift Philexim’s capital base to P4.3 billion by year’s end. “The bottom line is, we’re really expanding for the new programs referred to us,” Magsajo said.

                The Tier-2 program was seen fully documented and sold by the third quarter of the year, when interest rates shall have stabilized. Magsajo planned for the sale of P2.5 billion in Tier-2 notes but has a greenshoe option for P500 million in case of demand.

THE Bank of the Philippine Islands (BPI) yesterday signed a cash-management deal with Manila Water Co. to manage P9 billion in annual collection of the water-utility firm from 5 million customers in Eastern Metro Manila.

THE Philippine Export Import Credit Agency counts on stabilizing interest rates over the near term for elbowroom to raise as much as P3 billion in subordinated debt by the third quarter.

THE Bureau of Internal Revenue (BIR) said it would complete a partial automation of its operations and connect various collection districts to the national office in Manila by September.

THE Philippine National Bank (PNB) said it posted a net income of P457 million during the first quarter of the year, up 48 percent from P308 million a year earlier because of improvements in its core businesses and reduced non-performing assets.