PhilRatings said that the ratings primarily considered the ability of LGUGC to consistently generate cash as a result of continuing profitable operations, the absence of any default on guaranteed financial obligations, and the debt-free situation of the company to date.
LGUGC's broadly diversified investment structure complies with sound and tested investment policies and guidelines, and provides LGUGC with enough protection in terms of liquidity, profitability, and stability in the event of an economic downturn.
LGUGC's default-free status since it started its operations in 1998 may partly be attributed to the company's adherence to its customized and calibrated Manual of Guarantee Operations and Portfolio Risk Management Manual that have been audited and approved by three institutional stakeholders, namely: the Asian Development Bank (ADB), the United States Agency for International Development (USAID) and the World Bank (WB).
LGUGC has ample reserves to cover probable losses in relation to outstanding guarantees; a strong capital cushion which enables the company to accommodate a higher level of guarantees; and multiple layers of financial flexibility which can be tapped to enhance liquidity and guarantee claims payment capability.
Rivera - relationship manager of Mindanao Banking Center-Zamboanga, LGUGC
's Ernesto Hernandez, account officer; and Thelma Sansales, AVP operations head.