Announcement of World Bank Approves Three Hundred Two Million Three Hundred Thousand Dollars Loan to Continue Structural Adjustment Program in the Philippines on April 28, 1983

. . ~ FOR, IMMEDIATE . RELEASE ( ~ •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 83/70 CONTACT: Hugh Blackman April 28, 1983 (202) 477-3573 WORLD BANK APPROVES $302.3 MILLION LOAN TO CONTINUE STRUCTURAL ADJUSTMENT PROGRAM IN THE PHILIPPINES The World Bank has approved a $302.3 million loan to the Philippines to continue a program of structural adjustment in the country's economy. Reforms in the government's trade, energy, and industrial incentives policies are expected to lead to more efficient allocation of investment. The loan will fiL~nce essential private and public sector imports. The first phase of the government's structural adjustment program benefitted from a loan of $200 million approved in September 1980 by the International Bank for Reconstruction and Development (IBRD). The loan supported the implementation of a comprehensive industrial development program designed to accelerate industrial growth, expand employment, and maintain the rapid growth of non-traditional exports. Among the reforms being implemented • is a trade liberalization program, including a realignment of the tariff structure and removal of many import restrictions. The second phase of the structural adjustment program, supported by the $302.3 million IBRD loan, will revise performance incentives to allow market forces to play a greater role in guiding industrial investment. In addition, trade policy reforms will be expanded. The country's heavy dependence on oil imports will be re<luced through reforms and its public resource management will be strengthened. The current reforms, together with those implemented under the first phase of the government's structural adjustment program and measures implemented in conjunction with the IMF Standby Agreement for 1983, will improve the country's creditworthiness and thus should help maintain the country's access to international capital markets on rea.:i<.mable terms. The loan will be disbursed in two tranches. The first tranche of $202.3 million will be available at the time of loan effectiveness, while the second tranche of $100 million will be released after a progress review six months later. All disbursements are expected to be completed within 12 months of loan effectiveness. The IBRD loan is for 20 years, including five years of grace, at an annual rate linked to the cost of Bank borrowings. The loan also carries an annual commitment charge of 0.75% on undisbursed balances and a front-end fee • of 0.75% on the amount of the loan • NOTE: Money figures are expressed in u.s dollar equivalents.