By JADE LOPEZ, Cebu Gold Star Daily reporter
THE Confederation of Philippine Exporters in Cebu (Philexport-Cebu), the umbrella organization of nine export sectors in Cebu, is asking banking institutions here to ease out bank policies, particularly on exporters’ loans, amid the looming global crisis.
Philexport-Cebu President Jay Yuvallos said the organization is requesting the rescheduling or restructuring of exporters’ loans with private and government banks, apart from their call to the national and local governments to consider tax cuts or tax breaks and a freeze on wage increases.
This plea by Philexport-Cebu to members of the Cebu Bankers Club (CBC) transpired in a meeting arranged by Cebu Provincial Governor Gwen Garcia last March 24, said Philexport-Cebu Information and Advocacy Officer Jun Abines.
“Our exporters and the local bankers in Cebu are looking to discuss mutually beneficial ‘win-win’ solutions regarding the exporters’ degenerating credit worthiness and souring loan accounts,” Abines said in an interview yesterday.
“Several exporters complain that some banks have threatened to call on some distressed loan accounts on account of the deteriorating export markets abroad,” he said, adding that this alleged move by some banks have added undue pressure on the struggling local export industry that has been battling to survive from the effects of the global financial crisis.
The weakening demand for Philippine exporters in the world market, especially in the United States, have resulted to some export companies now streamlining operations to wait out the crisis and prepare for the expected recovery next year. Unfortunately for some export firms, they opted to shut down operations or to retrench a big percentage of their workforce.
Garcia, who voiced concern on the plight of Cebuano exporters, also appealed to CBC reminding the banks that preterminating on exporters’ loans will be more counterproductive while foreclosing exporters’ loan collaterals will deliver “even more catastrophic consequences.”
“The governor said that the banks will be in a better stead to help the exporters now rather than let them go down the drain,” Abines said.
Abines said members of the CBC already gave their assurance to Garcia and Philexport-Cebu that they will take into consideration all the issues raised by local exporters.
CBC, however, said that banks have their own company policies on distress loans as well as revenue targets that have to be achieved. They also pointed out that all banks operate under the supervision of the Bangko Sentral ng Pilipinas (BSP), which mandates banks to maintain strict liquidity ratios and meet minimum reserve requirements.
CBC former president Prudencio Gesta, in a separate interview, suggested that exporters and their respective banks should sit down and discuss problems on a case to case basis as each situation might be unique to the other.
Abines revealed Governor Garcia has requested for Philexport-Cebu and CBC to convene again this April 21 to hopefully iron-out all the concerns of both parties.
Abines said Philexport-Cebu has already drafted a position paper based on the issues raised during the meeting at the Capitol. The paper, which prayed for all-out support for the flagging export industry, will be distributed to the national government, legislature, BSP, Bankers Association of the Philippines, local government units, power distribution companies and other pertinent agencies.