Announcement of Eleven Million Five Hundred Thousand US Dollars Loan for Grain Processing in the Philippines on May 27, 1976

.World Bank 1818 H Street, N.W., Washington, D.C. 20433 1 U.S.A. • Telephone: (202) 393-6360 BANK NEW RELEASE NO. 76/64 May 27, 1976 $11.S MILLION LOAN FOR GRAIN PROCESSING IN THE PHILIPPINES A World Bank loan of $11 .5 million has been approved for a second gr£in processing project in the Philippines. The project will help provide the milling, drying, storage and transport facilities needed to increase the supply of rice and corn in the Philippines by·reducing post-harvest losses and inducing increased production in areas now vJithout adequate processing facilities. It will continue assistance begun under an earlier rice processing and storage project. This first project was supported by a $14.3 mill ion World Bank loan in 1971. The Development Bank of the Philippines (DBP) will administer the credit component of the project. Using proceeds of the World Bank loan and its own funds, DBP wil 1 provide loans to private individuals and corporations experienced in grain processing and trading. About 135 rice mills and 20 corn • mills, together with associated drying, storage and transportation facilities wi 11 be financed. At full development, the rice and corn mills to be financed under the project will produce annually more than 200,000 tons of milled rice with a wholesale of about $48 mill ion; 72,000 tons of milled corn valued at $11 .4 mill ion; and 60,000 tons of by-products valued at about $7 mill ion. The improved facilities are expected to reduce post-harvest grain losses by about 17,000 tons of grains a year. An increase in rice milling recovery rates is also expected, resulting in a net increase of about 7,000 tons of milled rice a year. The increased production to be induced in areas now without adequate processing facilities is estimated at 21,000 tons of grains. Approximately $11 mill ion in foreign exchange savings will result from the project. The World Bank loan is being made to the Republic of the Philippines for a term of 18 years, including 5 years of grace, at an interest rate of 3!% per annum. Of the proceeds of the loan, $11 .2 mill ion will be re-lent to DBP on the same terms as those of the Bank for on-lending to the private sector for specific grain processing enterprises. The balance of the proceeds wil 1 finance a post-harvest grain losses study to be administered by the Department of Agriculture. • NOTE: Money figures are expressed in U.S. dollar equivalents . Form No. 1121 (9-75) PROJECT: TE CHNI CAL Second Grain Processing DAT A • COUNTRY: Phil i pp i nes TOTAL COST: $28.5 mill ion BANK FINANCING: $11 .5 mill ion for 18 years, including 5 years of grace, at 81% per annum. OTHER FINANCING: Development Bank of the Philippines (CeP), $12.2 million; Sub-borrowers, $4.9 mi~l ion IMPLEMENTING ORGANIZATION: The credit component of the proj~ct will be administered by DBP, Makati, Rizal, Philippines( the grain losses study will be administered by the Department of Agriculture, Manila, Philippines. PROJECT DESCRIPTION: The project consists of a program of credit by DBP to assist in modernizing and expanding the grain processing industry . • It includes the construction, expansion and rehabilitation of about 135 rice and 20 corn processing facilities to be owned and operated by private individuals and corporations with prior experience in g,ain processing and trading. It also includes a post-harvest grain losses study. PROCUREMENT: 1) Contracts for civil works of more than $200,000 will be awarded on the basis of international competitive bidding. Contracts of between $200,000 and $100,000 will be awarded on the basis of competitive bidding advertised locally. Contracts of less than $100,000 will be awarded through ordinary commercial channels with due regard for economy and suitability. 2) Procurement of equipment and materials will be on the basis of quotations received from suppliers who will be prequalified by DBP after international advertisement. The list of pre- qualified suppliers will be updated annually. For equipment costing less than $20,000, sub-borrowers will use normal commercial channels with due regard for economy and SU i tab i 1 i ty. ECONOMIC RATE OF RETURN: Estimated rates of return range from 16% to 30%, with a weighted average of 28%. ESTIMATED COMPLETION DATE: 1981 -0- •