Announcement of Twenty Million Two Hundred Thousand Dollars Loan in the Philippines on July 22, 1964

...... ·-· ~~.- ·- ~ lNTERNATIONAL BANK FOR · • RECONSTRUCTION AND DEVELOPMENT 1818 H STREET., N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. t:A/28 Subject: $20.2 million ·loan in July 22, 1964 the Philippines The World Bank today made a loan equivalent to $20 .2 million to the National Waterworks and Sewerage Authority {NWSA) of the Philippines to expand and improve the water supply system of Manila and its suburbs. The provision of additional quantities of pure water at adequate pressures will make an effective contribution to public health, fire protection, housing development and industry. The works being undertaken with Bank assistance are the first part of a long-range program to provide an adequate water supply system in the Manila area and should meet re- • qt.tirements until the early 1970' s. Studies wilJ. be carried out concurrently to determine Manila's future water needs and to plan for the facilities ·needed after 1970. Sixteen United States commercial banks have agreed to participate in the loan, without the World Bank's·guarantee, to the extent of $1,020,000, representing all of' the first three maturities of the loan and parts of the fourth and fifth which fall due between July 1, 1969 and July 1, 1971. The participating banks are Chemical Bank New York Trust Company; Continental Illinois Nat;onal Bank and Trust Company of Chicago; The Chase Manhattan Bank, New York; The Mea.aow Brook National Bank, New York; Mellon National Bank and Trust Company, Pittsburgh; Central National Bank of Cleveland; The First National Bank of Memphis; Wells Fargo Bapk.., San Fr·a.n- cisco; The Marine Midland TJ:'Ust Company of New York; Ba.nk of America National Trust • and Savings Associatio:n, San FranciscoJ The Bank of California. National Association; ,-;  - 2 - National Bank of Commerce of Seattle; The First National Bank of Boston; The First Pennsylvania Banking and Trust Compatly, Philadelphia; Grace National Bank of New York; and Irving Trust Company, of New York. ·- In addition to the physical improvements of the Manila water system, exten- sive changes are being ma.de in NWSA' s management j organi.zation arid procedures to bring about a necessary improvement in its .efficiency and finances. NWSA, an autonomous government agency, is also responsible for the water supply systems in various cities and municipalities outside the Manila area; it will initiate studies to make similar improvements in the operation of these systems. Steps will also be taken to develop a long-range improvement plan for the sewerage system serving the Manila metropolitan area. The Manila metropolitan area also includes the cities of Quezon, Pasay, Calo· ' ocan and 16 contiguous municipalities. In the last 12 years the population has in- ci0eased by one million to 2. 8 million. and is continuing to grow at the same rate. Since the supply system was designed to meet the water requirements of only a mil- • l:i.on people, the rapid population growth has created an acute water shortage. Ma.tty areas now experience extended periods during which no water is available and all areas ar~ plagued by low. pressures. This situation has brought about a health hazard since people have to seek water from other sources which are unsafe. In recent years extensive damage has been caused by fires which could not be brought under co.ntrol because of low water pressures. Furthermore, housing construction bas been restricted by NWSA's inability to extend its·system, and developers have had to install costly well systems. Many small industries and commercial estab- lishments have also been seriously handicapped by the watf:i~ situation, being un-. able to furnish their own supplies as do m:my of the large industries. •  - 3 - The project being assisted by the Bank loan will take advantage of the new sources of water created by the Angat multi-purpose dam, for which the Bank made. a loan in 1961 to the National Power Corporation. It provides for the construc- tion of intake works, a tunnel about 4 miles long, aqueducts totalling about 16 miles in length, additions to the Balara water treatment plant, nine reservoirs and pumping stations located throughout the distribution systems, and the installa- tion of additional transmission and distribution mains. The new works will in- crease present water supply by about 750,000 cubic meters (200 million gallons) a day. The new installations are scheduled for completion in about three years at a total estimated cost of 188 million pesos ($48.2 million). The Bank loan will cover tlnse items which are to be procured on the basis of international competi- • tive bidding, all costs of engineering and management services and interest on the loan during the construction period. the program Will amount to P 251 million NWSA's total financial requirements for ($64.4 million); NWSA will finance the $44.2 million not covered by the Bank loan by local bond issues, earnings, and loans from the Philippine Government. The Bank loan is for a term of 25 years and bears interest at the rate of ~ per a.D!\'1tll• Amortization will begin in July 1969. The loan is guaranteed by the Republic of the Philippines • •