EXIM banks and export credit in the Philippines
How an overseas buyer pays a Philippine supplier with confidence, and how the country's state guarantee system and government banks stand behind the factory that makes your order.
Your side, the buyer Importer
- Raise a purchase order with agreed terms.
- Open a payment instrument, a wire or a letter of credit.
- Receive the documents and settle the balance.
The Philippine side Supplier
- A state guarantee backs its bank loan.
- LandBank or DBP funds materials and payroll.
- The factory produces and ships the order.
The Philippine export credit system at a glance
What an EXIM bank does, and what it does not do
An export credit agency is not a shop front bank. It works behind the lender and behind the factory. Knowing the boundary keeps your expectations honest.
What it does
- Backs a bank loan to a Philippine exporter or producer.
- Issues guarantees and support that let a factory fund a large order.
- Encourages banks to lend where the commercial market would hold back.
- Keeps production funded so schedules hold and materials arrive on time.
What it does not do
- It does not lend directly to the overseas buyer.
- It does not replace a letter of credit from your own bank.
- It does not pay you if the supplier fails to perform.
- It does not remove the need for a contract, inspection, and due diligence.
PHILGUARANTEE, formerly PhilEXIM
The Philippine Export Import Credit Agency, known as PhilEXIM, was the country's export credit agency. Executive Order No. 58, signed in 2018, merged it with the Home Guaranty Corporation and several other state guarantee programs into the Philippine Guarantee Corporation, or PHILGUARANTEE. PHILGUARANTEE is a government owned corporation attached to the Department of Finance and is the principal agency for state guarantee finance in the Philippines. For an importer, the practical effect is simple: the guarantee system that once ran under the EXIM name still runs today under PHILGUARANTEE.
| Facility | What it guarantees | Why a buyer should care |
|---|---|---|
| MSME Credit Guarantee Facility (MCGF) | A share of a bank loan to a micro, small, or medium enterprise. | A smaller supplier can accept your order and still fund fabric and trims. |
| Medium and Large Enterprises Credit Guarantee Facility (MLE CGF) | A share of a bank loan to a medium or large enterprise. | Larger production runs get the working capital they need. |
| Agriculture credit guarantee programs | Loans across agricultural and agri based value chains. | Upstream supply for cotton, blends, and other inputs stays financed. |
| Sustainable Energy Credit Guarantee Facility (SEGF) | Loans for sustainable energy projects. | Mill and factory power reliability supports steady production. |
A guarantee protects the Philippine borrower and its bank. It does not create a direct claim for the overseas buyer. Its value to you is an indirect one, a supplier that can fund and finish your order.
LandBank and DBP, the government banking arm
Behind the guarantee agency sit two state banks that move the money and the documents.
DBP trade products
DBP is the country's state development bank. Its trade desk handles the instruments an importer and an exporter actually use.
- Import letter of credit and foreign standby letter of credit.
- Documentary collection, documents against payment, and documents against acceptance.
- Direct remittance and open account settlement.
- Export letter of credit advising, confirmation, and negotiation.
- Export bills purchase, outward and inward bills for collection, and inward remittance.
- Trade credit facilities for working capital.
LandBank and development lending
LandBank is the largest government owned universal bank in the Philippines, built to serve farmers, fishers, and national development. It channels state credit programs into agricultural, industrial, and export borrowers.
- A commercial banking partner for a Philippine manufacturer that needs working capital.
- A conduit for government credit and guarantee programs in the agri industrial chain.
- A bridge between state development funding and private production.
These trade lines are extended to the Philippine supplier or its bank. You do not apply to DBP or LandBank as a foreign buyer. You benefit because your supplier can borrow, buy, and ship on schedule.
Payment methods compared
The method you choose decides who carries the risk before and after shipment. Most first orders between new partners use a letter of credit. Repeat orders move to open account as trust builds.
| Method | How it works | Who carries the risk | Typical fit |
|---|---|---|---|
| Cash in advance (C.I.A.) | You pay before the goods ship. | You, the buyer. | Custom or first orders, subject to Philippine foreign exchange rules. |
| Letter of credit (L/C) | Your bank promises payment against compliant documents, under ICC UCP 600 rules. | Shared, with both banks in the middle. | First orders and larger amounts. A confirmed, irrevocable documentary L/C is the recommended form. |
| Documents against payment (D/P) | A collecting bank releases the title documents only when you pay. | You, until you pay, then the supplier until shipment clears. | An established relationship with medium trust. |
| Documents against acceptance (D/A) | You accept a time draft, receive the documents, and pay later. | The supplier, who extends you credit. | Trusted repeat buyers, usually 30 to 60 days. |
| Open account (O/A) | Goods and documents ship first, and you pay on agreed terms. | The supplier. | A long standing relationship, commonly 30 to 180 days. |
| Direct remittance | You pay at once on receipt of the title documents. | You, after the documents are presented. | High trust and simple transactions. |
Philippine import payments do not need to be registered with the central bank, but banks report the transactions and foreign exchange purchases above set thresholds need supporting documents.
How a state guarantee lowers your risk
Production is funded
A guaranteed loan gives the supplier cash for fabric and trims, so a large order does not stall while it waits for your deposit.
Delivery is steadier
A funded factory buys materials on time and holds its schedule, which protects your delivery window and your own customer commitments.
Credit is available
Guarantees persuade banks to lend where they might otherwise decline, which widens the pool of Philippine suppliers able to take your work.
The relationship is the real shield
No guarantee replaces a clear contract, agreed inspection, and a payment instrument matched to the level of trust you have built.
From order to settlement
Request a quote
Send quantities, fabric, branding, and the destination market.
Agree the terms
Choose cash in advance, a letter of credit, documents against payment, or open account.
Open the instrument
If you use an L/C, your bank issues it in favour of the Philippine supplier.
Produce the order
The factory funds materials and runs production, supported by its own bank.
Ship and present documents
Bill of lading, commercial invoice, packing list, and certificate of origin.
Settle and release
Payment is made and the title documents are released to you.
Country sourcing guides
Pick your market for import rules, port notes, and local banking context.
Questions buyers ask
What is the Philippine EXIM bank today?
The Philippine Export Import Credit Agency, PhilEXIM, became the Philippine Guarantee Corporation, or PHILGUARANTEE, in 2018 under Executive Order No. 58. PHILGUARANTEE is the principal agency for state guarantee finance in the Philippines and is attached to the Department of Finance.
Does PHILGUARANTEE pay me, the overseas buyer?
No. PHILGUARANTEE guarantees loans made by partner banks to Philippine enterprises. Your protection comes from your contract, your chosen payment instrument, and your own due diligence on the supplier.
Which government banks handle Philippine trade finance?
DBP handles import and export letters of credit, documentary collections, and trade credit facilities. LandBank, the largest government owned universal bank, channels state credit programs into agricultural, industrial, and export borrowers.
What is the safest way to pay a Philippine supplier for a first order?
A confirmed, irrevocable documentary letter of credit opened by your bank in favour of the supplier, issued under ICC UCP 600 rules. It protects both sides because payment follows compliant documents rather than trust alone.
Can I pay a Philippine supplier in US dollars?
Yes. Philippine banks settle in US dollars and Philippine pesos, and the major Philippine commercial banks hold correspondent relationships with banks in the United States.
How long do documentary collections take?
Documents against payment and documents against acceptance usually settle in 30 to 60 days from the bill of lading date or the invoice date, depending on the terms you agree.
Do Philippine imports need central bank registration?
The Bangko Sentral ng Pilipinas does not require imports to be registered, but banks report the transactions, and foreign exchange purchases above set thresholds need supporting documents.
Who regulates Philippine banks?
The Bangko Sentral ng Pilipinas is the central bank and the banking regulator. Deposits are insured by the Philippine Deposit Insurance Corporation.
Coordinate your payment and production
Tell us the market, the quantity, and the payment method you have in mind. We will confirm terms and line the order up with a funded production slot.