Announcement of Thirty Million Dollars Bank Loan for Philippine Industry on February 2, 1978

FOR IMMEDIATE RELEASE •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 78/40 FEBRUARY 2, 1978 $30 MILLION BANK LOAN FOR PHILIPPINE INDUSTRY The World Bank is making a loan of $30 million to support an industrial investment project in the Philippines, mainly for lending to enterprises in manufacturing~ The loan will be the fifth Bank project to assist the Private Development Corporation of the Philippines (PDCP), the only privately owned long-term lending institution in the country. The World Bank loan will help to meet a part of PDCP's long- term capital needs over the next two years. It is the first to be associated with PDCP's effort to mobilize foreign exchange from externa 1 pr i-vate commercial sources. As of ..~une 30, 1977, PDCP had provided about $250 mill ion in financial assistance for 577 projects. These projects are estimated to have created 35,000 new jobs and to have resulted in net earnings of about $350 mill ion in foreign exchange. The average economic rate of return for a representative sample of about 100 of these projects was 43%. PDCP has. recently adopted a development strategy which envisages higher lending targets to productive enterprises, with emphasis on projects approved by the Board of Investment, smaller enterprises, balanced geographical distribution, and diversification of its sources of foreign exchange. PDCP also intends to play a larger role in providing technical assistance to agencies engaged in development work in the Philippines and to its sub-borrowers. As with the four previous Bank loans to PDCP, the $30 mill ion loan will be made to the Philippine National Bank, with the guarantee of the Republic of the Philippines. The loan carries an interest rate of 7.45% a year, plus a handling fee of 3/4% charged by PNB. Subloans made by PDCP will have terms of up to 15 years, including maximum 5 years of grace. The Bank Joan will have an amortization schedule reflecting the aggregate of PDCP's repayment schedules in respect of its sub-loans . • NOTE: Money figures are expressed in U.S. dollar equivalents.