Announcement of Thirty Million for Small and Medium Industries Development in the Philippines on May 29, 1975

• 1818 H STREET. N.W .. WASHINGTON Bank News Release No. 75/46 D. C. 20433 TELEPHONE: EXECUTIVE 3-f·360 May 29, 1975 $30 MILLION FOR SMALL AND MEDIUM INDUSTRIES DEVELOPMEHT rn THE PHILIPPINES The World Bank has announced a $30 million loan to assist the development of small and medium industries in the Philippines. The lean will help to meet two priority needs of Philippine small and medium ind us tries, which account for over 80,~ of the total number of firms employing 20 or more workers. These needs relate to increased access to institutional sources of credit and technical assistance aimed directly at solving operating problems. The proceeds of the loan will be relent by the Government to three agencies: the Development Bank of the Philippines (DBP), the Industrial Guarantee and Loan Fund (IGLF) administered by the Central Bank, and the National Electrification Adminis- tration (NEA). DBP, with $15 million, and IGLF, with $12 million, will finance a wide range of • small and medium industries in manufacturing, agro-industries, transportation, small engineering facilities and small construction works. NEA, with $2.3 million, will finance the establishment of 24 industrial producer cooperatives. The Government, through the Department of Industry, will use the remaining $700,000 to establish seven regional technical assistance centers to serve small industries. The subloans to be made by the three recipient agencies will assist Government efforts to promote rural and labor-intensive small and medium industries. These sub- .loans will be at an interest rate of 12% a.year, for terms of up to 12 years, including a grace period of up to two years. At full operation, the industries assisted are expected to create 12,300 jobs, mostly in rural areas, and to increase investments in small and medium industries by about $43 million, in current prices. The project is expected to result in additional annual gross value-added of about $22 million and to gene1::: additional wages of about $7 million. The World Bank loan of $30 million. is being made to tlL Re?ublic of the Philippines for a term of 16 years, including four years of grace, at 8-1/2% interest a year. Re- lending by the Government to the three agencies will be on the same terms as the Bank • loan. ------------- Note:Hon:ey figures are expressed in US dollar equivalents. 0