Thursday, July 24, 2008 Philexim calls on exporters to get ‘insurance’ policy
STATE-owned Philippine Export-Import Credit Agency (Philexim) confirmed that it had a “hard time” selling its insurance product since most exporters only see it as an added cost.
“It is an investment,” stressed Alex Arabis, officer-in-charge of Philexim’s accounts management department for Visayas and Mindanao during a professional “get-together” hosted by Cebuano alumni of the University of Asia and the Pacific yesterday.
In Cebu, Arabis said there are only four or five companies that have availed themselves of its export credit insurance. At present, there are approximately 700 members of the Confederation of Philippine Exporters (Philexport)-Cebu.
Most of those that availed themselves of the insurance product were those who experienced non-payment of exported goods by foreign buyers, Arabis said.
Under the terms of the export credit insurance, Philexim will pay for the products delivered to a foreign buyer, in case the latter is unable to pay. This is made possible through Philexim’s tie-up with the Global Credit Alliance, made up mostly of government-owned agencies like Philexim.
In case a foreign buyer fails to pay, under the insurance term, Philexim will pay the exporter and will run after the foreign buyer and collect from the agency to which the buyer belongs to.
Arabis also said that it is beneficial for Filipino exporters to avail themselves of the export credit insurance since most do not have the resources to run after foreign buyers who do not pay.
He said the companies that availed themselves of a similar product from Philexim’s counterparts in other countries are considered to be more aggressive in exporting even to “risky markets.”
Aside from this, with the economic slowdown in the United States—the number one destination of Philippine export products —the insurance is a guarantee that the exporters will be paid even when a US company files for bankruptcy.
“In 30 days when the foreign buyer declares bankruptcy, we can (process) for the release of payment to the exporter,” said Arabis, adding that several US companies have already filed for bankruptcy.
The insurance policy can also be used as collateral for bank loans. (DME)
