By Lawrence Agcaoili

State-owned sovereign guarantor Philippine Export-Import Credit Agency registered a net income of P115.5 million in 2008, a reversal of the P395.1-million loss it posted in 2007, due to robust guarantee and credit insurance business.

PhilExim president and chief executive Francisco Magsajo Jr. reported during the company?s 32nd anniversary celebration on Friday that the guarantor breached the century mark in net profit for the first time in its history.

PhilExim originally expected its net income to hit just P18.04 million.

?This is reflective of the overall success of the initiatives introduced to turn around the financial performance of the company from a severe loss in the prior year,? he said.

Magsajo added that net operating income before provisions amounted to P218.16 million.

He said core income from guarantee and credit insurance operations went up 35 percent to P282.84 million.

Magsajo said core revenues were derived essentially from drawdowns or availments by existing accounts as well as from new guarantee issuances for old and new ones.

Other income, Magsajo said, came principally from trading turnovers on fixed income securities that amounted to P32 million last year from zero in the past years.

He said the government managed to save P41.22 million after just spending P193.24 million of the P234.5-million budget. Spending for personal services amounted to P113.4 million while cash outlays for maintenance and other operating expenses reached P64.1 million

PhilExim assets increased 47.2 percent to P2.784 billion from P1.891 billion while total liabilities jumped 148 percent to P1.285 billion from P518.5 million. Net worth rose 9.1 percent to P1.498 billion from P1.373 billion.

Magsajo, who replaced former PhilExim president Virgilio Angelo, implemented various reforms aimed at cutting its default rate to 9.0 percent and double its guarantee issuances by the end of this year.

The agency plans to almost double its guarantee issuances to P23 billion from the current P12 billion by beefing up its capitalization through the issuance of P1.4 billion tier 2 notes.

The agency has strengthened its risk management office under a corporate reengineering to look into the capacity of its clients to pay their obligations in its bid to cut its default rate to 9.0 percent. It has steadily reduced its default rate from a high of 15 percent.