Announcement of Private Banks to Use World Bank Loan to Philippines for Small and Medium Industries on June 7, 1982

• FOR IMMI J)IA Tl Rf H ,\ SI " • . ( Q :ft, 0 .(/ (J . ·.·-. · . 011 . .. ' .. ··.·"P,6 . D :,~ World Barlk(1 18l,8 H Street, N.W., Washington, D.C.d0433, U.S.A.• Telephone: (202) 477 ~1234"~> • ' . ~ J '.J (I \I BANK t£WS RELE$E NO. 82/113 Contact: Sundaram Sankaran June 7, 1982 ' (202) 477-3962 n PRIVATE BANKS TO USE W0RLD HANK LOAN TO PHILIPPINES FOR SMALL AND MEDIUM INDUSTRIES 1 Private development ,banks in the Philippines will ·:receive World Bank funds for the first time for invest.tng in small 'imd medium industries. In announcing today the approval of .a $132 million loan to the Phliippines, the'? World Bank said that 'the, small private banks which supply credit 1119inly to cottage and'' small-scale indus,tries will have access to part of the . Bank loan ...... The Industrial Guarantee and Loan Fundj established ' by the government and admlniste1"1ed by the Central Bank of the Philippi~1es to encourage industrial development=in the ·country, will receive the bulk of the loan, amounting to $63 m!lllofl. Jhe next largest share, $48 million, will go to the Development Bank of the Philippines, which will use $27 million of its share to lend ctirectly to small and medium industrial enterprises and $21 million to the aez9redi ted private development banks. A smaller amount, $7 million, will be available to the·Ministry of · Trade and Industry as a budgetary allocation to finance technical assistance services. The proceeds of the World Bank loan are expected to support about ·2,100 investments and create some 33,000 jobs the private manufacturingin. sector. , · · The technical assistance to be provided under this.project, the third from the World Bank for the development of small and medium industries in the Philippines, will help to alleviat~ the key constraints and guide the structurali changes necessar_:,y to upgrade ~he quall ty of the output of these industries. The assistance wit! be channelled "through the Bureau of Small and Medium Industries itJ the Ministry of Trade and Industry. The World Bank loan is fo;r 20 years, including five years of grace, with interest at 11.6% a year. It also carries an annual commitment charge of 0.75% on undisbursed balances, and includes a front-end fee of 1.5% on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents.