PHILFOODEX EXPERIENCE:PHILFOODEX EXPERIENCE:Access to FinancingAccess to Financing

Mr. Roberto C. Amores, PresidentOct. 2, 2008

PHILFOODEX: Challenges

One of the major concerns:

Year 2007

• On February 3, PHILEXIM granted a PhP 25 million revolving credit line to PHILFOODEX to lend to its members who are in need.

• MOA signing held during the 6th Philippine FOOD EXPO was widely publicized.

• Another government financial institution was willing to reach out and grant loans through PHILFOODEX as a conduit.

 

Scorecard:

• The PHILEXIM loan facility was an opportunity for PHILFOODEX to know more its members.

• It started with a cleansing process for old members by way of re-registration to include background checkings on their character and financial credit standings and served as an opportunity to screen incoming members.

Scorecard:

• First year of availment: Php 5.5 million.• We cannot yet claim complete success.

BUT we can claim at least that through the PHILEXIM facility, the lending terms and procedures are better than before.

• Members can access facility when needed.

• Repayment was 100%

Reasons for low availment of facility by members:

Scorecard:

Some SMEs simply cannot cope with the documentation requirements or simply cannot meet a shorter periodic repayment schedule to match their cash flows.

• PHILFOODEX requested PHILEXIM to reduce its interest rate from 12% to 10% or lower so it can effectively pass this on to its members at only 12.5%.

• PHILEXIM approved a New Revolving Credit Line in the amount of Php 25 million at an interest rate of 10% per annum plus 0.5% GRT.

Response to low availment:

• Effective September 22, 2008, the one year RCL can be used in any or a combination of the following purposes:

Response to low availment:

• PHILEXIM facility, although not the best financing program, is a GOOD PROGRAM.

• incorporates certain basic credit discipline that the members should observe.

• does not compromise the position of PHILFOODEX as conduit, which could become a problem as a result of allegations such as “PALAKASAN” o “PAGKAKAIBIGAN” since the policies and procedures are simple and clear.

• enhanced the GOOD GOVERNANCE of PHILFOODEX, especially in deciding on loan applications and handling of funds.

Observations

• The international buyers demand for lower prices and better quality product, citing better offers from other suppliers from other ASIAN countries like Thailand, Vietnam and China.

• Government to help more than ever the SMEs. Fortunately, some of our advocacies to improve the cost of doing business were addressed. BUT NOT SIGNIFICANTLY ENOUGH, CONSISTENT AND TRANSPARENT COMPARED TO OUR ASIAN NEIGHBORS, not to mention the tedious expensive red tapes by the bureaucracy which if done well enough to respond to the needs of SMEs could have improved a lot on the expansion and competitiveness of Philippine products.

• Concern: we lost a voice in the PHILEXIM Board representing the export industry. We hope that in compliance with the law, a private sector representative be immediately appointed at the PHILEXIM Board.

Concluding remarks

Thank you!