Professional Documents
Culture Documents
Our Aspiration
Our Commitment
Financial Highlights
Total Revenues
1,000
800
800
600
Total ASSETS
536
447
4,000
3,500
3,000
400
2,500
200
2,000
2,856
2,480
2008
2009
2010
2008
Total Expenses
500
400
300
367
313
2009
2010
Total Liabilities
445
3,000
2,500
2,000
200
1,500
100
1,000
1,994
2,240
2,346
2009
2010
2008
2009
2010
2008
COMPREHENSIVE Income
500
Net Worth
357
400
300
200
3,319
1,500
973
1,200
900
120
114
600
100
486
616
300
2008
2009
2010
2008
2009
2010
Table of Contents
1 Financial Highlights
2 Message of His Excellency
3 Message of the Chairman of the Board
4 Report of the President & CEO
6 Role of PhilEXIM
10 Review of Operations
14 Highlights of 2010
16 Corporate Social Responsibility
17 Board Level Committees
18 Statement of Management's Responsibility
for Financial Statements
My warmest greetings to the Philippine Export-Import Credit Agency (PhilEXIM), on the publication
of your 2010 Annual Report.
Our country's growth depends much on our ability to hone our local industries as active
participants in the national economy. As the institution tasked with extending credit, insurance,
and related financial services, you have been instrumental in increasing the capabilities and
restoring the confidence of our local entrepreneurs, enabling them to compete in the global
markets. These achievements augur well for the development of our country's export and priority
sector industries and, in a much larger sense, for our collective vision to raise the standards of
business and industry in the Philippines.
As you close another fruitful year, may you continue to fulfill your mandate as positive instruments
of change. In this daylight of hope, we see a bright future and a horizon of opportunities for our
nation. Let us remain united on the straight and righteous path as we usher in an era of efficiency
and responsible management in government.
Message of the
Chairman of the Board
Cesar V. Purisima
Board Chairman, PhilEXIM
Secretary, Department of Finance
GUARANTEES
Guarantee Program for SMEs
Guarantees on short term loans of up to P20 million
or its equivalent in US Dollars to direct and indirect
exporters, firms involved in priority projects of the
government and import substitution industries.
Guarantee Program for Large Accounts
Guarantees on loans to direct and indirect exporters,
firms involved in priority projects of the National
Government and import substitution industries and
guarantees on investments.
Wholesale Guarantee Program for SMEs
Guarantees on existing loan portfolio of financial
institutions to direct and indirect SME exporters with
amounts of at least P50 million but not to exceed
P200 million per conduit institution.
DIRECT LENDING
Short-Term Direct Lending Program for SMEs
5) Energy
6) Mining
Tourism-Related Projects
Type of Project
Nature of Requirements
CREDIT INSURANCE
Insurance coverage to exporters against the risk of nonpayment by foreign buyers of export shipments on credit
arising from political or commercial risks.
Development of:
ICT zones (i.e. cyber park or IT park dedicated to IT
locators)
1) Tourism
Nature of Requirements
3) Agri-Modernization
4) Infrastructure
Mining Projects
Type of Project:
Nature of Requirements:
10
Review of Operations
Fulfillment of a Strategy
11
12
13
14
Highlights of 2010
1st Quarter
ASEAN Workshop on Sharing of
3rd Quarter
Briefing of delegates as part of
2nd Quarter
Site inspection at Carmen Copper
Corporation
4th Quarter
Briefing on PhilEXIMs programs
for the Tourism Industry Players
of Bohol Tourist Services MultiPurpose Cooperative for its
Wholesale Lending Program
Presentation of PhilEXIMs
15
16
Audit Committee
Chairman
Jose F. Santos
Vice: Augusto B. Santos
Members
Armando L. Suratos
Paterno H. Dizon 2
Margarita R. Songco 3
Jose F. Santos 4
Rodolfo G. Serrano, Jr.
Credit Committee
Chairman
Francisco S. Magsajo, Jr.
Audit Committee*
Installs and ensures the full operationalization of a proper
and adequate control system that guarantees reliability
of reporting, safeguarding of assets, compliance with
rules and regulations on financial and related matters as
well as effectiveness and efficiency of operations.
Credit Committee*
Approves credit transactions of up to P100 million
and pre-approves all credit transactions beyond P100
million before presentation for approval by the Board of
Directors.
Corporate Governance Committee**
Oversees PhilEXIMs compliance efforts with respect to
the Code of Corporate Governance, Code of Ethics,
and related laws, rules and regulations as well as
company policies and procedure; and keeps abreast of
the developments in the field of corporate governance
that might affect PhilEXIM.
Risk Oversight Committee (ROC)***
Assists the Board in directing the affairs of the Corporation
particularly in the development and oversight of the
Corporations risk management plan and program.
It also assists the Board in assessing and providing
oversight to management relating to the identification and
evaluation of major risks involved in the Corporations
business operations or any other areas that could create
significant risks to the Corporations results of operations,
reputation or capacity to fulfill its mandate.
* Meets monthly.
** Meets every other month.
*** Meets quarterly.
Members
Jose F. Santos
Proceso T. Domingo 6
Armando L. Suratos
Roberto B. Tan
Cristino L. Panlilio 7
Rodolfo G. Serrano, Jr.
Augusto B. Santos
Corporate Governance Committee
Chairman
Paterno H. Dizon
Vice: Rodolfo G. Serrano, Jr.
Members
Francisco S. Magsajo, Jr.
Roberto B. Tan
Jose F. Santos
Margarita R. Songco
Proceso T. Domingo
Augusto B. Santos
Risk Oversight Committee
Chairman
Margarita R. Songco
Vice: Augusto B. Santos
Members
Francisco S. Magsajo, Jr.
Armando L. Suratos
Inclusive periodS
1 January-July 2010
5 January-June 2010
2 July-December 2010
6 January-August 2010
3 August-December 2010
7 August-December 2010
4 January-August 2010
17
18
Statement of Management's
Responsibility for Financial Statements
The Management of the Philippine Export-Import Credit Agency (PhilEXIM) is responsible for all information and
representations as stated in the financial statements as of December 31, 2010. The financial statements have been
prepared in conformity with the accounting and financial standards generally accepted in the Philippines, and
reflect amounts that are based on the best estimates and informed judgment of Management with an appropriate
consideration to materiality.
In this regard, Management maintains a system of accounting and reporting which provides for the necessary internal
controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized
use or disposition, and liabilities are recognized.
The Board of Directors of the Corporation reviews the consolidated financial statements before such are given the final
approval consideration.
The Commission on Audit has examined the consolidated financial statements of the Corporation in accordance
with generally accepted state auditing standards and has expressed its opinion on the fairness of presentation upon
completion of such audits in its report to the Board of Directors.
ROBERTO B. TAN
Alternate Chairman
Board of Directors
MARILOU A. MEDINA
Senior Vice President
Finance Services Sector
TEODORA M. LACERNA
Supervising Auditor
May 5, 2011
19
20
Balance Sheet
as restated
Note
2010
2009
CURRENT ASSETS
Cash and cash equivalents
Financial investments - available for sale
Loans and receivables
Other assets
3
4
5
6
535,599,533
1,697,143,676
331,369,076
26,108,832
2,590,221,117
40,050,042
1,537,955,979
817,420,876
16,802,843
2,412,229,740
NON-CURRENT ASSETS
Loans and receivables, net
Investment property, net
Property and equipment - net
Other assets
5
7
8
6
496,924,848
96,722,702
104,488,021
30,405,871
728,541,442
196,998,940
60,799,127
152,385,912
34,001,120
444,185,099
3,318,762,559
2,856,414,839
ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Accounts payable
Loans payable
Interest payable
Accrued expenses
Income tax payable
Unearned income
Miscellaneous payables
9
10
11
12
13
14
15
39,285,520
2,200,000,000
12,117,610
9,121,656
3,263,959
34,489,608
41,854,645
2,340,132,998
293,654,906
1,800,000,000
13,636,129
8,650,452
1,383,094
69,651,677
47,912,637
2,234,888,895
NON-CURRENT LIABILITIES
Unearned Income
14
5,586,420
5,308,455
2,345,719,418
2,240,197,350
973,043,141
616,217,489
3,318,762,559
2,856,414,839
TOTAL LIABILITIES
EQUITY
16
17
13,954,914,439
13,183,617,356
18
337
335
as restated
Note
Revenue
Operating income
Guarantee, commitment and processing fees
Interest and penalties
Interest on investments and deposits
Gain on sale of investment
Gain on sale of acquired assets
Insurance premium and commission
Miscellaneous income
Other income
Foreign exchange gains
Gain on sale of equipment
19.1
19
19.2
19.4
19.3
Expenses
Operating expense
Personal services
Provision for doubtful accounts
Licenses and taxes
Depreciation expense
Rent, light and water
Impairment loss
Other services
Audit fees and services
Administration expense
Communication expense
Business development expense
Representation expense
Legal fees and other services
Insurance
Staff training and development
Dues and subscription
Travelling expense
Impairment loss - property & equipment
Discretionary expense
Supplies and materials
Fuel, oil and lubricants
Consultancy expense
Repairs and maintenance
Semi-expendable expense
Advertising and promotions
Miscellaneous expense
Other expense
Interest and financial charges
Net income before final tax
Final tax
Net income
Other comprehensive gain (loss)
Unrealized gains (losses) on available for sale investment
Total comprehensive income for the year
See accompanying Notes to Financial Statements
20
21
2010
2009
361,963,134
203,964,167
110,721,332
52,062,050
2,012,605
2,262,364
66,057,387
288,987,202
56,479,054
124,900,987
21,984,404
13,312,510
697,674
9,481,984
433,885
64,249
799,541,173
20,053,694
75,944
535,973,453
122,273,254
90,308,078
31,289,366
12,004,611
11,884,343
9,691,922
7,833,578
2,419,212
2,257,690
2,166,934
1,917,500
1,631,851
1,400,499
1,290,515
1,248,671
984,781
966,120
878,410
856,043
843,908
830,833
664,275
397,201
194,753
12,717
740,589
306,987,654
117,568,253
100,000,000
24,793,834
11,519,200
9,794,184
6,999,681
2,052,991
4,411,255
3,754,533
3,043,134
1,822,167
459,349
1,117,832
671,952
992,743
1,281,025
617,970
740,635
931,230
601,479
2,586,991
215,580
73,438
203,875
296,253,331
137,936,650
444,924,304
354,616,869
22,141,391
332,475,478
70,574,045
366,827,376
169,146,077
22,573,966
146,572,111
24,350,174
(32,942,647)
356,825,652
113,629,464
21
22
as restated
2010
2009
482,203,658
321,938,325
Miscellaneous income
304,988,824
234,980,625
Reinsurance premiums
Cash payments to employees and suppliers
(1,256,043)
(5,141,530)
(118,093,612)
(104,252,157)
(161,224,920)
(1,351,462,225)
444,190
1,188,395
29,138,634
22,212,990
(126,324,993)
(124,280,271)
409,875,738
(1,004,815,848)
(171,440,472)
361,689,945
1,019,161
439,089
(8,654,753)
(16,781,474)
(179,076,064)
345,347,560
871,180,000
700,000,000
(6,235,701)
(471,180,000)
180,733,116
(180,733,116)
(128,590,985)
(71,378,993)
265,173,314
628,621,007
(423,497)
20,053,694
495,549,491
(10,793,587)
40,050,042
50,843,629
535,599,533
40,050,042
Note
Balance, January 1, 2009
Capital
Stock
16
Deficit
16.2
4,891,899,438
(4,397,680,436)
(4,251,108,325)
(24,573,624)
332,475,478
4,891,899,438
(3,918,632,847)
Total
502,588,025
(32,942,647)
146,572,111
24,350,174
Net income
Balance, December 31, 2010
8,369,023
(32,942,647)
Other
Comprehensive
Income (Loss)
16.3
616,217,489
24,350,174
332,475,478
(223,450)
973,043,141
23
24
amounts in
Philippine Peso
1. CORPORATE INFORMATION
The Trade and Investment Development Corporation of the Philippines (TIDCORP),
formerly known as the Philippine Export and Foreign Loan Guarantee Corporation
(PHILGUARANTEE), is a wholly-owned government financial institution attached to
the Department of Finance. Established on January 31, 1977 by virtue of Presidential
Decree No. 1080, the Corporation was renamed TIDCORP and granted expanded
functions by Republic Act No. 8494 on February 12, 1998. To strengthen its role in
the development and expansion of international trade as well as to effectively respond
to the economic requirements of the country, TIDCORP was designated as the Philippine
Export-Import Credit Agency by virtue of Executive Order No. 85 on March 18, 2002.
The address of its registered office is 17th Floor Citibank Tower, Citibank Plaza, Valero
St. Makati City.
TIDCORPs corporate objective is to contribute to the countrys economic development as
the Philippine Export-Import Credit Agency providing guarantees, credits, insurance and
technical assistance services. Its mission is to stimulate, increase and develop the export
of goods and services by assuring speedy and unobstructed access to trade finance
for viable exporters, especially the small and medium enterprises and to help generate
employment in the export sector. Moreover, its programs and services also aim to support
projects in priority areas of the National Government where the country has distinct
advantage and where foreign exchange may be generated and/or saved.
Under Republic Act No. 8494, TIDCORPs expanded functions are the following:
T o promote and facilitate the entry of foreign loans into the country for development
purposes having special regard to the needs of export-oriented industries, industries
registered with the Board of Investments, public utilities, and industries the promotion
of which is encouraged by government policy;
T o guarantee loans granted by Philippine banking and financial institutions to
qualified exporters, producers of export products, and contractors with approved
service contracts abroad;
T o facilitate and assist in the implementation of approved service contracts abroad
entered into by Philippine entities, enterprises, or corporations with foreign exchange
earning potentials, by providing counter-guarantees to Philippine banks and
financial institutions issuing stand-by Letters of Credit or of Letters of Guarantee for the
performance of said service contracts;
T o meet requests from domestic entities, enterprises, and corporations to assist
them in the coordination of their development and expansion plans with a view to
achieving better utilization of their resources;
T o provide technical assistance in the preparation, financing and execution of
development or expansion of programs, including the formulation of specific project
proposals; and
T o undertake such actions that is consistent with the primary purposes of the
Corporation.
2. ACCOUNTING POLICIES
The principal accounting policies adopted in preparing the financial statements of the
Corporation are as follows:
TIDCORP is a going concern entity which financial statements have been prepared
on accrual basis, except when stated otherwise, and in accordance with the
historical cost convention. The presentation and classification of item in the financial
statements is consistent with the previous year.
Comparative information has been presented in respect of the previous period for all
amounts reported in the financial statements.
The financial statements for the year ended December 31, 2010 were authorized for
issue in acceptance with a resolution of the board of directors on January 26, 2011.
2.2 Adoption of the Philippine Financial Reporting Standards (PFRS)/Philippine
Accounting Standards (PAS)
Under the Philippine Accounting Standards (PAS) 1, financial statements shall not
be described as complying with Philippine Financial Reporting Standards (PFRS)/
PAS unless they comply with all the requirements of PFRS. The TIDCORPs financial
statements have been prepared in compliance with some, but not all, PFRS and PAS
as aligned with the provisions of the International Financial Reporting Standards
(IFRS). References to the preparation of these statements in accordance with the PFRS/
PAS should be viewed with this qualification and related disclosures. The TIDCORP
has adopted the applicable PFRS/PAS consistent with those of the previous financial
years and compliance thereto mentioned in the specific accounts where applicable.
In accordance with PAS 1 (Revised 2009), Presentation of Financial Statements
(effective January 1, 2009), an entity is required to present all items of income and
expense recognized in the period in a single statement of comprehensive income or
in two statements: a separate income statement and a statement of comprehensive
income. The income statement shall disclose income and expense recognized in
profit and loss in the same way as the current version of PAS 1. The statement
of comprehensive income shall disclose profit or loss for the period, plus each
component of income and expense recognized outside of profit and loss classified
by nature (e.g. gains or losses on available-for-sale assets). Changes in equity arising
from transactions with owners are excluded from the statement of comprehensive
income (e.g. dividends and capital increase). An entity would also be required to
include in its set of financial statements a statement showing its financial position (or
balance sheet) at the beginning of the previous period when the entity retrospectively
applies an accounting policy or makes a retrospective restatement.
PAS 21 - provides that unrealized gains and losses due to change in exchange
rates/prices regardless of classification of assets are recognized under the income
statement. TIDCORP recognized unrealized gains and losses in accordance with
Section 45 of R. A. 7653. The realized gains and losses are recognized in the
income statement under PAS 21.
Unless otherwise stated, the CY 2010 balances are prepared under the historical
cost convention and/or applicable PFRS/PAS.
PAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, removes
the concept of fundamental error and allowed alternative to retrospective statement
to correct prior period errors. It defines material omissions or misstatements and
describes how to apply the concepts of materiality when applying accounting
policies and correcting errors.
PAS 10 Events after Balance Sheet date prescribes the accounting policies and
disclosures related to adjusting and non-adjusting subsequent events. Additional
disclosures required by the standards were included in the financial statements,
principally the date of authorization for release of the financial statements.
PAS 16 Property, Plant and Equipment provides additional guidance and
clarification on recognition and measurement of items of property, plant and
equipment with a cost that is significant in relation with the total cost of the item shall
be depreciated separately.
PAS 36 Impairment of Assets which prescribes the procedures that an entity applies
to ensure that its assets are carried at no more than its recoverable amount; requires
recognition of impairment losses and reversal of this; and prescribe disclosures.
PAS 37 Provisions, Contingent Liabilities and Contingent Assets ensures that
appropriate recognition and measurement bases are applied to provisions,
contingent liabilities and contingent assets and significant information is disclosed.
At each balance sheet date, the Corporation reviews the carrying amount of
its tangible assets to determine whether there are any indicators of impairment.
If indicators of impairment exist then the recoverable amount of an asset is
estimated. If the recoverable amount of an asset is less than its carrying amount,
the difference is recognized in the income statement as an impairment loss.
The Corporation reviews its problem loans, advances and contingent liabilities
at each reporting date to assess whether an allowance for impairment should
be recorded in the income statement. In particular, judgment by Management
is required in the estimation of amount and timing of future cash flows when
determining the level of allowance required. Guided by BSP rules and
regulations, such estimates are based on assumptions about a number of factors
and actual results may differ, resulting in future changes to the allowance.
If the amount of the effect in future periods is not disclosed because estimating it
is impracticable, an entity shall disclose the fact.
The accounting policies adopted are consistent with those of the previous financial
year.
The Corporation adopted in CY 2007 the prescribed policy on Loans and
Receivables which should be measured at amortized cost using the effective interest
method in accordance with PAS 39.
b. Investment Property
Investment property is property (land or a building or part of a building or both)
held (by the owner or by the lessee under a finance lease) to earn rentals or for
capital appreciation or both.
Buildings
Office equipment, furniture & fixtures
Transportation equipment
Other property, plant & equipment
10-30
5-10
7-10
5
years
years
years
years
e
nd of construction or development, for a transfer from property in the
course of construction or development to investment property.
Major repairs/renovations are depreciated over the remaining useful life of the
related asset. The assets useful lives are reviewed, and adjusted if appropriate,
at each balance sheet date.
25
26
c. Financial Instruments
The classification of financial instruments at initial recognition depends on the
purpose for which the financial instruments were acquired and their characteristics.
Due from banks and Loans and receivables are financial assets with fixed
or determinable payments and fixed maturities that are not quoted in an active
market. They are not entered into with the intention of immediate or short-term
resale and are not classified as Financial assets held for trading, designated
as Financial investment available-for-sale or financial assets designated
at fair value through profit or loss. Loans and Receivables are measured
at amortized cost using the effective interest method. Those with maturities in
less than one year are included in the current assets, and those with maturities
greater than 12 months after the balance sheet date are classified as noncurrent assets.
Pursuant to the BSP Circular No. 520 dated March 20, 2006, TIDCORP
adopted the following policies in accounting for ROPA (see Note 2.2):
L and and buildings are accounted for using the cost model under PAS 40
Investment Property;
B
uildings and other non-financial assets are depreciated over the remaining
useful life of the assets, which shall not exceed ten years and three years from
the date of acquisition, respectively; and
The appraisal of all ROPA is made at least every other year to determine
whether impairment exists. Immediate re-appraisal is conducted on ROPA which
materially decline in value.
d. Impairment of Assets
Assets that are subject to amortization are tested for impairment whenever
events or changes in circumstance indicate that the carrying amount may not
be recoverable. An impairment loss is recognized for the amount by which the
assets carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an assets fair value less costs to sell and value in use. Impairment
losses are recognized in the income statement in the period in which they were
incurred.
Investment Property (IP) includes office space not used in operations. Investment
property shall be recognized as an asset when it is probable that the future
economic benefits that are associated with the investment property will flow to
the entity and the cost of the investment property can be measured reliably. IP is
held to earn rentals or for capital appreciation or both.
Starting January 01, 2005 TIDCORPs property and equipment were carried at
cost less any accumulated depreciation and accumulated impairment losses. As
of balance sheet date, review of the carrying amount of TIDCORPs property and
equipment indicated impairment for some items. Hence, recoverable amount for
these assets were estimated. The impairment loss was properly recognized in the
income statement.
f. Provident Fund
TIDCORP has a Provident Fund for the benefit of its employees. The contributions
made to the Fund are recognized in the income statement in the period they arise
at the following rates:
e
nd of construction or development, for a transfer from property in the course
of construction or development to investment property.
An investment property is derecognized upon disposal or when the investment
property is permanently withdrawn from use and no future economic benefits
are expected from its disposal. Any gains or losses on the retirement or disposal
of an investment property are recognized in profit or loss in the period of the
retirement or disposal.
O
ther non-financial assets shall be accounted for using the cost model under
PAS 16 Property, Plant and Equipment;
Transfer to, or from, investment property shall be made when, and only when,
there is a change in use, evidenced by:
g. Recognition of income
As proposed under the new CAR framework and as required by the Bangko
Sentral ng Pilipinas (BSP) the balance of the Allowance for Doubtful Accounts of
P2.327 billion was already recognized as of December 31, 2010, net of the
effect of the write-off of P665.265 million implemented in CY 2009.
Revenue is recognized when it is probable that the economic benefits will flow to
the Corporation and the revenues can be reliably measured.
Cash and cash equivalents as referred to in the cash flow statement comprises
cash on hand, current accounts and amounts due from banks on demand or with
original maturity of three months or less.
i. Provisions
Provisions are recognized when the Corporation has a present obligation (legal
or constructive) as a result of a past event, and it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
The Corporation periodically reviews the quality of its real and contingent
exposures in loans, other receivables and outstanding guarantees portfolio and
estimates probable losses due to payment defaults, insolvency of the debtor,
decline in the value of collaterals and other related factors that would render the
debtor incapable of meeting financial obligations.
TIDCORPs provisioning of valuation reserves on doubtful accounts is pursuant to
Bangko Sentral ng Pilipinas (BSP) Circular No. 247 dated June 22, 2000 and
BSP Circular No. 313 dated December 27, 2001.
Provisions for doubtful accounts have been recognized in the books to meet the
proposed Capital Adequacy (CA) framework, duly approved by the Bangko
Sentral ng Pilipinas-Monetary Board (BSP-MB) in CY 2010.
Under the new Capital Adequacy Ratio (CAR) framework, TIDCORPs CAR was
set at 7%, 5% of which should be Tier 1 capital by December 31, 2012. During
the transition period beginning 2011, its CAR must not be lower than 3% and by
January 1, 2012 should be at 5%.
j. Use of Estimates
2010
Cash on hand
Cash in bank
Land Bank of the Philippines (LBP)
Development Bank of the Philippines (DBP)
Foreign Currency
164,764
4,019
624,142
175,408
37,245,219
38,209,533
521,828
1,372,417
951,778
2,850,042
481,449,000
3,400,000
15,941,000
497,390,000
535,599,533
33,800,000
37,200,000
40,050,042
2009
2010
2009
76,796,523
1,113,086,172 1,137,957,240
472,973,631 399,998,739
34,287,350
1,697,143,676 1,537,955,979
27
28
5.1 Current
This account consists of the following:
Loans receivable
Interest receivable on investments
Interest receivable on loans
Accounts receivable
2010
306,668,965
21,283,141
2,780,183
636,787
331,369,076
(As restated)
2009
793,126,880
20,468,401
3,703,037
122,558
817,420,876
Loans receivable
This account represents the outstanding balance of loan releases to clients under the
Direct Lending and the Wholesale Lending Programs.
The decrease in the Loans Receivable account was due to the pre-termination of a
Loans Receivable account under the Lending Program.
Treasury bonds
Phil. interest reduction bonds
Special savings deposit
Cultural Center of the Phil. bonds
Foreign Currency Deposit time deposit
2010
19,314,441
1,725,571
171,646
70,000
1,483
21,283,141
2009
18,667,187
1,725,571
5,580
70,000
63
20,468,401
Accounts receivable
This account represents trade receivables from clients under the different program
offerings, namely; guarantee, direct lending and credit insurance programs.
5.2 Non-current
This account consists of the following:
2010
135,041,962
361,882,886
496,924,848
2009
169,991,306
27,007,634
196,998,940
Loans receivable
This account represents the long-term portion of the outstanding balance of the loans
receivable originated by the enterprise under the Direct Lending Program.
Long-term portion
Allowance for doubtful accounts
2009
2010
Total
a. World Grannary,
Inc. (WGI)
b. Software
Ventures, Inc. (SVI)
709,951,184
454,169,762
438,281,302
1,602,402,248
26,206,747
41,191,389
240,788,820
308,186,956
736,157,931
495,361,151
679,070,122
1,910,589,204
6,600,984
b. Southwoods
Apparel, Inc.
4,785,928
-
6,600,984
4,785,928
1,489,856
1,489,856
d. Factory Direct
This account represents accrued interest receivable from loans receivable with current
status as of the balance sheet date. Section 4 of BSP Circular No. 202, series of
1999 provides that no accrual of interest income is allowed if a loan has become
non-performing. Interest on non-performing loans shall be taken up as income only
when actual collections thereon are received.
2008
General Facility Program
2009
1,246,677,680
(1,219,670,046)
27,007,634
From CY 2008 to 2010, TIDCORP settled advances on called guarantees for the
following accounts:
2010
1,924,297,098
(1,562,414,211)
361,882,887
2010
200,026,969
(64,985,007)
135,041,962
2009
254,316,760
(84,325,454)
169,991,306
535,884
535,884
11,386,912
2,025,740
13,412,652
747,544,843
497,386,891
679,070,122
1,924,001,856
As a result of the call on the guarantees issued in favor of the creditor-banks, TIDCORP
settled advances on these default accounts aggregating to P1.924 billion covering
principal and interest amortizations due covering the period December 2006 to
November 2010 for large and SME accounts. For SVI, a total of P308.187 million
has been paid representing interest of P70.769 million from February 2007 and
full settlement of the principal loan of US$5-million or P237.418 million due last
May 2010 with Deutsche Bank. For WGI, a total of P1.602 billion has been paid
representing principal and interest amortizations to the Royal Bank of Scotland
(formerly ABN-AMRO), United Coconut Planters Bank (UCPB) Commercial, UCPB
Savings, UCPB Trust and the Philippine Bank of Communications (PBCom) covering
the period December 2007 to November 2010 based on the courts order as
embodied in the approval of the Rehabilitation Program of WGI issued last June
2008.
6. OTHER ASSETS
6.1 Current
This account represents various advances made covering legal fees for the account
of the National Government pursuant to Board Resolution No. 1094 dated March
29, 1996, net of required valuation reserves.
2010
19,417,243
4,143,539
1,236,756
714,873
353,798
242,623
26,108,832
(As restated)
2009
9,987,431
1,607,753
1,306,182
3,333,369
388,959
179,149
16,802,843
The two per cent Minimum Corporate Income Tax (MCIT) for the taxable year 2010
is recorded to an asset account, Deferred Charges MCIT in the amount of
P19.058 million. This is credited against the normal income tax due for a period not
exceeding three taxable years immediately succeeding the taxable year in which the
same has been paid pursuant to the provisions of BIR Revenue Regulation No 9-98
dated August 25, 1998. For CY 2010, the expired portion of deferred charges
MCIT amounts to P2,196,676.
The increase in Deferred Charges was due to estimated Minimum Corporate Income
Tax due for CY 2010, while the Prepaid Expenses cover property insurance on
foreclosed property and fees to the Bureau of the Treasury on the guarantee cover of
the National Government on the Corporations borrowings.
6.2 Non-current
Other investments
This account represents TIDCORPs investment in equity securities which are valued at
cost. As of the balance sheet date, the Corporation holds a total of 6,450 shares of
10 per cent Cumulative Convertible Preferred Stock, P10.00 par value under PLDTs
Subscriber Investment Plan.
Miscellaneous assets
This account represents the following assets of the Corporation:
2010
1,749,733
762,963
751,409
636,000
3,900,105
(As restated)
2009
1,548,843
762,963
1,049,718
636,000
189,549
4,187,073
2010
16,920,480
5,851,493
3,382,793
286,499
64,500
3,900,105
30,405,870
(As restated)
2009
19,200,000
6,880,255
3,382,793
286,499
64,500
4,187,073
34,001,120
Non-trade receivables
This account covers the non-trade receivables from the TIDCORP Provident Fund (TPF)
representing the seed money allocated and released to institute the Car Funds being
administered by the TPF, to cover the Car Plan of qualified TIDCORP Officers.
Particulars
TIDCORP Provident Fund
Existing employees
Separated employees
Others
Allowance for
Amount
Doubtful Accounts
16,920,480
2,025
2,025
39,247
39,247
5,183,096
5,183,096
22,144,848
5,224,368
Net Amount
16,920,480
16,920,480
7. INVESTMENT PROPERTY
This account represents the cost of the office spaces at the 3rd and 4th floors for lease and
acquired assets or Real and Other Properties Acquired (ROPA) which was reclassified
from the Building Account and Acquired Assets/ROPA Account in compliance with PAS
No. 40 as follows:
Cost
January 1, 2010
Reclassification
December 31, 2010
Accumulated depreciation
January 1, 2010
Depreciation
Adjustment
Reclassification
Accumulated depreciation
December 31, 2010
Accumulated impairment
January 1, 2010
Impairment
Disposal
Accumulated impairment
December 31, 2010
Building
ROPA
Total
44,812,627
74,682,987
119,495,614
33,943,097
33,943,097
44,812,627
108,626,084
153,438,711
15,345,214
1,444,448
(112,478)
27,609,877
25,229
5,312
-
15,370,443
1,449,760
(112,478)
27,609,877
44,287,061
30,541
44,317,602
3,851,107
9,691,922
(1,144,622)
3,851,107
9,691,922
(1,144,622)
12,398,407
12,398,407
75,208,553
21,514,149
96,722,702
29,467,413
31,331,714
60,799,127
This investment property Non-current Assets Held for Sale covers the properties acquired
by the Corporation through dacion in payment or foreclosure in settlement of loans under
the Direct Lending and Guarantee Programs.
29
30
Building
Cost
January 1, 2010
Additions
Disposals
Reclassification
December 31, 2010
Accumulated depreciation
January 1, 2010
Depreciation
Disposals
Adjustment
Reclassification
Accumulated depreciation
December 31, 2010
Accumulated impairment
January 1, 2010
Impairment
Disposals
Adjustment
Accumulated impairment
December 31, 2010
Furniture and
Equipment
161,668,059
(74,697,486)
86,970,573
Total
79,203,424 240,871,483
8,593,933
8,593,933
(5,552,096)
(5,552,096)
3,551,817 (71,145,669)
85,797,078 172,767,651
39,026,413
7,655,630
(3,925,913)
(24,223,701)
47,519,847
4,729,414
(5,240,591)
-
86,546,260
12,385,044
(5,240,591)
(3,925,913)
(24,223,701)
18,532,429
47,008,670
65,541,099
1,939,311
878,410
(28,028)
(51,162)
1,939,311
878,410
(28,028)
(51,162)
2,738,531
2,738,531
68,438,144
36,049,877
104,488,021
122,641,646
29,744,266
152,385,912
9. ACCOUNTS PAYABLE
This account represents the Short-term Loan Line of P2.200 billion with the LBP in the
amount of P1.950 billion and with RCBC in the amount of P250 million, from a level of
P1.800 billion as of December 31, 2009. The increase during the year of P400 million
represents additional drawdown of P250 million from LBP and P150 million from RCBC.
2010
2009
6,093,707 12,186,497
4,387,831
1,100,503
250,277
151,869
1,385,795
12,117,610
197,260
13,636,129
This account represents trade payables of the Corporation, broken down as follows:
2010
39,203,464
67,206
14,850
39,285,520
2009
293,572,850
67,206
14,850
293,654,906
9.2 COFACE
This account represents the share of Compagnie Francaise D Assurance Pour
Le Commerce Exterieur (COFACE) TIDCORPs reinsurer in the Credit Insurance
Program, in the buyers credit limit application fees covering the cost of credit
information verification conducted on the foreign buyers of the clients under the
Credit Insurance Program of the Corporation.
Non-Current
-
Total
34,322,562
2,405,967
2,405,967
3,180,453
5,586,420
5,308,455
3,347,499
40,076,028
74,960,132
This account represents guarantee fees collected in advance from various accounts under
the Guarantee Program, capitalized interest on restructured accounts as well the interest,
penalties and other charges on which proceeds from the foreclosure/dacion of assets
were applied.
Clients deposit
Other current liabilities
Miscellaneous deposits
Trust liabilities
Reinsurance premium payable
2010
18,574,354
15,561,316
6,455,669
1,216,946
46,360
41,854,645
(As restated)
2009
19,557,617
17,275,783
6,240,356
1,216,946
3,621,935
47,912,637
This account represents the net effect of unrealized gain/loss on available-forsale (AFS) investment portfolio of the Corporation. Accordingly, the adjusted fair
value of the AFS is presented as a separate item under equity.
2010
6,488,366
5,007,500
2,127,390
1,260,011
363,623
146,201
88,306
76,019
3,900
15,561,316
2009
5,183,493
7,464,395
2,534,721
1,040,978
767,597
135,118
72,749
72,832
3,900
17,275,783
(18,091,652)
4,397,680,436
(146,572,111)
4,251,108,325
4,251,108,325
(332,475,478)
3,918,632,847
(As restated)
2009
4,415,772,088
This account covers excess guarantee fees and advance collection of credit insurance
premiums, interest and penalties collected from clients under the various program
offerings of the Corporation which shall be applied to future fees due.
2010
4,251,108,325
General Facility
Preshipment Export Finance
Guarantee Program
Postshipment Export Risk
Guarantee Program
Wholesale Guarantee Program
2010
2009
13,952,664,439 13,094,247,356
1,125,000
17,325,000
1,125,000
13,954,914,439
17,325,000
54,720,000
13,183,617,356
For short-term and wholesale guarantee cover, guarantees are booked upon issuance
of the guarantee. While for long-term guarantee cover, the contingent liability booked
is equal to the drawdowns/availments from the guarantee facility within the accounting
period.
For CY 2010, movement in Outstanding Guarantee is as follows:
General Facility
Availments/Drawdowns
US Dollar
Peso
3,150,000
Amortization/Cancellation
US Dollar
Peso
11,637,574,989
100,715,232 6,084,207,350
Preshipment
Export Finance
Guarantee
Program
16,200,000
Postshipment
Export Risk
16. EQUITY
Guarantee
Program
16,200,000
54,720,000
3,150,000
On January 11, 1985, Presidential Decree No. 1962, further amending Section
7 of Presidential Decree No. 550, as amended by Presidential Decree No. 1080,
was issued increasing the authorized capital stock of the Corporation from P2.000
billion to P10.000 billion which is fully subscribed by the Government of the
Republic of the Philippines. As at December 31, 2010, the paid-in capital amounts
to P4.892 billion.
16.2 Deficit
This account represents the accumulated losses from prior years operations and the
result of the transfer of Non-Performing Assets and related liabilities to the National
Government pursuant to Administrative Order No. 64 dated March 24, 1988 and
Deed of Transfer dated March 08, 1989.
11,637,574,989
100,715,232
6,171,327,350
31
32
This account represents loan and guarantee collateral in the form of land certificates of
tiles, chattels, and other securities to ensure repayment by borrowers/clients which were
assigned P1.00 per item pursuant to the Financial Reporting Package of BSP.
Several accounts in the 2009 financial statements were reclassified to conform with the
2010 presentation.
19. REVENUE
This account consists of the following:
2010
361,963,134
203,964,167
110,721,332
52,062,050
2,262,364
2,012,605
433,885
64,249
66,057,387
799,541,173
2009
288,987,202
56,479,054
124,900,987
21,984,404
697,674
13,312,510
20,053,694
75,944
9,481,984
535,973,453
This represents processing fees from the direct lending program, pre-termination fees
from a guaranteed account, interest and penalty charges earned from restructured
loans and other receivables classified as default accounts and lease income from
investment property.
2,200,597
3,497,061
107,545
764,878
1,168,011
14,670
11,021,796
396,374
888,768
1,500
20,061,200
On January 26, 2011, the Board of Directors approved the declaration and distribution
of cash dividends to the National Government in the estimated amount of P216 million,
P150 million of which was remitted to the Bureau of the Treasury on January 28, 2011
and the balance upon issuance of the CY 2010 Annual Audit Report of the Commission
on Audit.
Credit
This represents interest and penalty charges earned on current loans receivable,
restructured loans, receivables from subrogated claims and other receivables.
Debit
121,358
1
107,545
2,710
1,168,011
9,320,769
42,700
4
1,543,840
7,440,642
14,670
298,950
20,061,200
2010
110,721,332
(22,141,391)
88,579,941
2009
124,900,987
(22,573,966)
102,327,021
a. Board of Directors
The Board of Directors is responsible for the overall risk management approach
and for approving the risk principles and strategies.
T o define the level of crisis that the Board of Directors intends for the company
to survive without external assistance and that the same crisis level does not
escalate to a point that it can not survive.
To articulate in advance what to do, when, how and by whom to manage a
crisis or liquidity situation to avert any escalation of the same with the minimum
of financial impact.
The role of the RMO is to assist and support management in attaining and
maintaining a high quality risk asset process as well as healthy and sound
portfolio quality that would result to the attainment of the agencys objectives as
to profitability, service efficiency and product delivery.
As a result of the shift by the Corporation from HTM to AFS, TIDCORP maintains a
portfolio of highly marketable securities that can be easily liquidated in the event
of unforeseen interruption of cash flow. Likewise, due to the dynamic nature of the
underlying businesses, Fund Management and Treasury Operations Departments
of the Corporation aim to maintain flexibility in funding by keeping committed
credit lines available.
Market risk is the risk that the fair value or future cash flows of financial instruments
will fluctuate due to changes in market variables such as interest rates, foreign
exchange and equity prices.
g. Internal Audit
In order to address this, Management, in the weekly meeting of the Asset Liability
Committee (ALCO), discusses the behavior of the market in terms of prevailing
interest rates and mark-to-market valuation of TIDCORPs AFS government
securities. In this light, the ALCO establishes guidelines for the investment mix
of the Corporation. Likewise, it establishes limits for financial risk-taking and
confirmation of lending rates to existing clients. The projected foreign exchange
level is also tackled to address risks related to its existing FX assets and liabilities.
c. Market Risk
Credit risk is the risk that the Corporation will incur a loss because its customers,
clients or counterparties fail to discharge their contractual obligations. The
Corporation manages and controls credit risk by setting limits on the amount of
risk it is willing to accept.
The Corporation credit risk is concentrated on its loans and guarantee portfolios
and it has established credit quality review process to provide early identification
of possible changes in the creditworthiness of counterparties. Counterparty
limits are established by the use of a credit classification system which assigns
each counterparty a risk rating. The credit quality review process allows the
Corporation to assess the potential loss as a result of the risks to which it is
exposed and take corrective actions.
d. Operational Risk
a. Credit risk
Operational risk is the risk of loss arising from systems failure, human error,
fraud or external events. When controls fail to perform, operational risks can
cause damage to the reputation, have legal or regulatory implications, or lead
to financial loss. TIDCORP cannot expect to eliminate all operational risks, but
through a control framework and monitoring, TIDCORP is able to manage the
risks. Controls include effective segregation of duties, access, authorization and
reconciliation procedures, staff education and assessment processes, including
the implementation of internal audit.
33
34
Board of Directors
s e at e d :
Cesar V. Purisima*
Chairman
Secretary, Department of Finance
s ta n d i n g , f r o m l e f t :
Margarita R. Songco
Paterno H. Dizon
Roberto B. Tan
Armando L. Suratos
Jose F. Santos
s e at e d :
Cristino L. Panlilio
Gregory L. Domingo
Sonia T. Valdeavilla
35
36
Corporate Officers
Business Development
Groups 1 & 2
from left
Celso R. Gutierrez
Senior Vice President
Julita Leah M. Garcia
Vice President
Florencio P. Gabriel, Jr.
Executive Vice President
Jane U. Tambanillo
Executive Vice President
Francisco S. Magsajo, Jr.
President & CEO
Rovi M. Peralta
Vice President
Ma. Clarissa B. Tuazon
Senior Vice President
Emmanuel R. Torres
Vice President
Marilou A. Medina
Senior Vice President
Gloria O. Lacson
COA Auditor
Boobie Angela A. Ocay
Vice President
Francisco S. Magsajo, Jr.
President & CEO
Federico F. Remo
Executive Vice President
Arsenio C. De Guzman
Vice President
Estrellita N. Tesoro
Vice President
Isabelo G. Gumaru
Senior Vice President
Ian A. Briones
Vice President
Pamela Angeli M. Solis
Vice President
Jane L. Laragan
First Senior Vice President
Lilia G. Baun
Vice President
Francisco S. Magsajo, Jr.
President & CEO
37
38
Corporate Values
EXCELLENCE
competence
exceed targets
service excellence
role modeling
extra mile
INTEGRITY
honesty in time, resources, money,
materials, information, sense of
responsibility and accountability
commitment/loyalty
GOOD GOVERNANCE
effective planning and management
clear delineation of responsibilities
observing lines of authority
transparency
model by example
PROFESSIONALISM
coming to work on time
competence
observing ethical standards and practices
INNOVATION
adaptability to change; openness to change
creativity in problem-solving
new ideas, new products, new processes
up-to-date with developments/trends
TEAMWORK
harmonious relationships
sharing
good interpersonal skills
cooperation
mutual understanding
dependability
PhilEXIM EVP Jane U. Tambanillo (2nd from right) joins eight other AEBF member countries in the signing
of the Reciprocal Risk Participation Agreement and AEBF Membership Protocol
39
40
Management Directory
Marilou A. Medina
Eduardo S. Angeles
vice president
sme department
Teresita C. Cometa
vice president
remedial & asset disposition department
vice president
fund management department
Gloria O. Lacson
Celso R. Gutierrez
Ian A. Briones
coa auditor
vice president
human resource department
Lilia G. Baun
vice president
business development group 1
vice president
corporate planning &
communications office
Jane U. Tambanillo
Estrellita N. Tesoro
vice president
information technology department
Operations Group
Rovi M. Peralta
Federico F. Remo
vice president
business development group 2
Arsenio C. De Guzman
vice president
treasury operations DEPARTMENT
vice president
business development group 2
concept, design
photography by