Background

Our partner was a well-established medical equipment distributor operating in the Philippines' healthcare market, specializing in respiratory care. The distributor had identified a significant opportunity with a major regional public hospital in Eastern Visayas that urgently needed to upgrade its respiratory care capabilities to serve the region's underserved population.

The target hospital, like many Philippine public healthcare facilities, was experiencing increasing patient volumes and required advanced ventilator systems to provide critical respiratory care services. However, the hospital faced the typical constraints of public sector procurement - strict budgetary controls, limited capital expenditure allocations, and lengthy government approval processes that would delay essential healthcare improvements for months or even years.

This specific opportunity represented both the potential and the challenges of the Philippine public hospital market: significant healthcare impact for underserved communities, but seemingly insurmountable financing barriers that traditional approaches could not address.

The Challenge

The distributor and public hospital faced several critical obstacles that were preventing successful market penetration in the public sector:

• ‍Public Sector Financing Constraints: Public hospitals in the Philippines operate under strict budgetary controls managed by the Department of Health ("DOH"), creating multiple barriers to equipment procurement. Unlike private institutions, they cannot provide audited financial statements or standard credit documentation, making conventional financing structures impossible. Government hospitals rely entirely on budget allocations from central government agencies for capital expenditure needs, with budget cycles often extending 12-18 months and requiring multiple approval levels. The target hospital had no capital expenditure budget allocated for the medical equipment purchase, meaning that waiting for proper budget allocation would significantly delay critical healthcare improvements.

• Operational Budget Constraints: In the short and medium term, there was no capital expenditure budget allocated to the public hospital. After reviewing their monthly operational budget availability, the hospital requested the distributor to structure a payment plan that matched their operational budget capacity, and would not result in unexpected expenses over at least a 5-year period.

• Distributor Working Capital Limitations: The medical equipment distributor lacked sufficient working capital to fund the ventilator purchase upfront while offering extended payment terms to the public hospital.

The Solution

Philips Capital's Smart Financing Approach

Working at Philips Capital, Xander Vissering developed together with the Philips HealthTech sales team a customized financing solution that addressed the challenges of both the distributor and the public hospital:

• Selling Medical Equipment as-a-Service solution: The sales team worked closely with the distributor to support a respiratory care solution including a comprehensive 5-year product warranty coverage, focusing on minimum downtime whilst keeping operational expenses predictable over a 5-year period.

• ‍Collaborating with the right partners to make the solution work: We structured the transaction through a well-established Philippine medical equipment distributor with strong local market knowledge and existing relationships with public healthcare institutions. Furthermore, Xander Vissering was able to build a strong relationship with a local leasing company - also with strong market knowledge - that was willing to tailor their financing services subject to acceptable risk management conditions.

Our partnership resulted in a Smart Three-Party Financing Structure:

• ‍Equipment Sale with Extended Payment Terms: Philips HealthTech sold equipment to the local distributor with an extended payment term, covered by a comprehensive 5-year warranty showing Philips HealthTech commitment to the Public hospital.

• ‍Operating Lease Agreement: The distributor provided the solution to the public hospital through a 60-month operating lease at a predictable, monthly fixed fee, allowing the public hospital to pay from their monthly operational budget without limiting themselves to DOH capital budget availability, fully backed by Philips HealthTech's support & services.

At the same time, this deal structure allowed Philips to preserve its cash flow. Our local leasing partner provided non-recourse receivable financing through immediate discounted payment to Philips HealthTech for the total contract value, effectively functioning as accounts receivable factoring without recourse.

Critical risk management elements that made this financing solution work:

• Comprehensive Product Warranty covering the financing period, ensuring equipment reliability and service continuity to both the distributor and the public hospital.
• Distributor responsibility for payment collection and first-line support services, leveraging local expertise in government payment processes.
• Distributor's strong credit standing and willingness to provide collateral to the leasing company, significantly reducing the risk of late and non-payment.

Results

Our partnership led to the following successes:

• Penetrated the Public Sector Market: We successfully delivered a medical equipment-as-a-service solution to a regional public hospital, establishing a replicable program that creates recurring revenue opportunities across the Philippines' public healthcare sector and beyond.

• Secured Competitive Advantage: Our financing solution differentiated Philips HealthTech and the distributor from competitors who could not offer similar payment flexibility to public hospitals.

• Expanded Healthcare Access: We delivered critical respiratory care and ventilator equipment without capital budget constraints, immediately improving respiratory care capacity for the underserved population in Eastern Visayas.

• Achieved Seamless Payment Collection: We managed timely payment collection throughout the financing period, with the distributor successfully handling public sector payment processes, including typical check-based payments and single-signatory authorization requirements.

Client Testimonial

"Xander Vissering's expertise in structuring smart financing solutions was instrumental in unlocking a critical market segment for our operations in the Philippines. His understanding of operational risk criteria and local market dynamics enabled us to transform public sector financing challenges into a competitive advantage. Finding the right local leasing partner made this receivable financing structure work: he solved our immediate transaction need by enabling the distributor to be able to proceed with the project, and at the same time created a scalable solution that we could use for other opportunities as well."

— Ashwin Chari, Former Country Manager, Philips Philippines

Conclusion

This case study demonstrates how smart financing can transform market dynamics in emerging economies with challenging public sector procurement environments. By addressing both distributor liquidity needs and government customer payment constraints, the smart financing structure enabled sustainable business growth while advancing healthcare accessibility in underserved regions.

The multi-stakeholder approach—combining equipment with relevant services, a partnership, and flexible financing structures—illustrates how smart financing solutions can unlock market potential that traditional approaches cannot address.

While this transaction was developed and structured in the Philippine market, the core principles—understanding operational risk criteria, building strategic partnerships, and structuring solutions that align with customer operational constraints—are directly applicable to exporters facing similar challenges when selling capital equipment to government customers in other markets.

As the founder of Orange Capital Solutions, Xander Vissering now brings this proven expertise in program structuring and financing to exporters seeking to overcome similar challenges in international markets.

Ready to explore export financing for your international opportunities?

Contact Orange Capital Solutions to discover how smart financing solutions can accelerate your global growth while preserving working capital for business expansion. Our proven expertise in cross-border project structuring can transform financing challenges into a competitive advantage for exporters selling capital equipment in markets worldwide.

‍Contact us at info@orangecapital.solutions to schedule your export financing consultation.