Announcement of Philippines Consultative Group Meeting on October 3, 1975

eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE OCTOBER 3, 1975 PHILIPPINES: CONSULTATIVE GROUP MEETING The following announcement was issued on October 2, 1975 at the World Bank's European Office in Paris. The fifth meeting of the Consultative Group for the Philippines was held in Paris on October 1 and 2, 1975, under the chairmanship of the World Bank. Representatives of the following countries were present: Australia, Belgium, France, Federal Republic of Germany, India, Italy, Japan, New Zealand, Spain, United Kingdom and the United States. Also represented were the International Monetary Fund, the United Nations De- • velopment Programme, the Asian Development Bank and the Organization for Economic Cooperation and Development. The Philippine delegation was led by the Honorable C2sar Virata, Secretary of Finance. The Group discussed an economic memorandum prepared by the World Bank and presentations by members of the Philippine delegation. The meeting commended the Philippine Government for its effective response to difficulties resulting from recent international economic events. Continued inflation in the price of imports and reduced demand for Philippine exports in late 1974 and 1975 had contributed to a weakening in the Philippine terms of trade. The trade deficit was financed partly by development assistance disbursed by members of the Consultative Group ana external loans f=om other sources. The balance of payments, which was in surplus in 1974, is expected to record a deficit in 1975, which will be covered mainly by drawing on the IMF oil facility. The meeting noted that, in the face of worldwide economic diffi- culties, the Government continued to pursue a sound, long-term development strategy. Domestic inflation had been brought down to an annual rate of • less than 10% in 1975. Investment in public infrastructure doubled in 1974/75. Over the last several years the Government had initiated a number of programs to improve agricultural credit, rural electrification and small-scale irrigation; these programs, designed to sp~ead the benefits I . ..  -2- of econc~m-1.c gru1·.1th., continue to make progress. The Government's policy was summar.ized in P:~.=-:~d.. dent Na.re.as' message to the meeting; :;i..t will continue to promote r,.1pid ~i"Gw-ch d.nd employment in the agricultural and industrial • sectors 1..1.n:i to ~=~'-l),'.m<l and diversify exports to strengthen its balance of payments posi1 ion. This policy received support from the meeting. Tlu~ Philippi.He de ~-E~gation reviewed some of its development plans, focus<.-:,J.uf. c,11 plans in the transport sec tor. Programs for food production, ag:i:-a.rian ""·;c. r·o nn, srnall-sc.ale industry, family planning, power generation and transnn,-.si.,Jn, ; ourisrn and housing were also described. The meeting nor:ed Lha :· 1 ·,·~· 7 e.stmi-,nts prc,posed. in these high priority areas were large :::;.. i -I.ncb.,.'. •.1 u mnrtber uf projects which would be suitable for financing from cir. t i~dd. i.'he meeting i..:unc.luded that the prospects of the Philippine economy were very f':OOd. Maint:Rining the momentum of growth will require continuing support f1:·c1m the j :1 c•1.~national conununity. In order that disbursements attai.n a 1evel commensurate with the level of public development expenditures tequired in the latter part of the decade, the meeting agreed that efforts should b(: :-acde to ma~nt:ain in real terms the current level of project and prograI11 a2sistance from official sources. In this context the Group also agreed that it was appropri.c1.te for the Government of the Philippines to • aim at obtaining new cnr,nru.tments of at least $600 million equivalent in 1976. I~ was provisi.onally agreed that the next meeting of the Group would be hi::<Ld in May of 1976) probably in Paris. - 0 - •