Announcement of World Bank Loans Support Philippine Economic Recovery Effort on March 17, 1987

FOR IMMEDIATE RELEASE JWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 ~ANK NEWS RELEASE NO. 87/45 Contact: Pastor B. Sison (202) 477-3653 WORLD BANK LOANS SUPPORT PHILIPPINE ECONOMIC RECOVERY EFFORT WASHINGTON, March 17 -- The World Bank is supporting an economic recovery program in the Philippines through two loans -- an Economic Recovery Loan (ERL) for $300 million and an Economic Recovery Technical Assistance Project (ERTAP) for $10 million. In recent years, the Philippine economy has been buffeted by domestic and external events which have led to an abrupt decline in economic growth and a severe reduction in living standards for the majority of the population. The present administration has placed a high priority on economic recovery and has identified four areas for immediate attention, which the ERL is supporting. These include (1) reform of the tax system, (2) continuation of the program of trade liberalization, (3) restructuring of the public investment program, and (4) reform of government financial institutions. The government has already taken steps to implement these reforms. The ERL will be disbursed in three tranches of $100 million over two years, linked to further progress on these structural reforms. The first tranche is available immediately; the second and third will be released following World Bank reviews of implementation of programs. The ERTAP, which provides technical assistance to help the government undertake required financial restructuring of public sector institutions, will be disbursed within 36 months. The loans are for 20 years, including five years of grace, with a variable interest rate, currently 7.92 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents.