Export finance - issues and directions : case study of the Philippines

I I~~~ o ir-I INDUSTRY AND ENERGY DEPARTMENT WORKING PAPER INDUSTRY SERIES PAPER No. 42 Export Finance-Issues and Directions Case Study of the Philippiries FIL LE December 1990 ".4#~~~~~~~~ 0~~~~~~~~~~~~~~~~ The World Bank Industry and Energy Department, PRE a . . } E~~~~~~  EXPORT FINANCE--ISSUES AND DIRECTIONS Case Study of the Philippines December 1990 Yung Whee Rhee, Kevin Young, and Eva Galvez Industry Development Division Industry and Energy Department Policy, Research and External Affairs  TABLE OF CONTENTS Page No. I. INTRODUCTION AND SUMMARY ............................. 1 A. Introduction ......................................... 1 B. Summary of Findings ................................... 2 C. Unique Characteristics of Trade Finance Market Mechanisms ............. ...................... 6 D. Summary of Suggestions ........... ...................... 8 II. CENTRAL BANK EXPORT LOAN PROGRAM .................... 11 A. Interest Rates .............. .......................... 11 B. Procedures . .......................................... 11 C. Composition of EPLs .................................. 12 D. Major Issues . ........................................ 12 Ill. OTHER EXPORT FINANCE SCHEMES .17 A. PITC Schemes ......................................... 17 B. Export Industry Modernization Program ...................... 17 C. LIVECOR's WC Financing Program ........................ 18 D. The Philippine National Bank's International Trade Financing Program ........... ..................... 18 E. IGLF Scheme ......................................... 18 F. Trade Facility ...... ................................. 18 G. Summary of Other Schemes ......... ..................... 19 IV. PRESHIPMENT EXPORT FINANCE GUARANTEES .20 A. Export Credit Guarantee Program for Small and Medium Industries .............. ...................... 20 B. Guarantee Program Supported by USAID .................... 22 C. Magna Carta for Smal Enterprises ......................... 23 D. Direction of PEFG Reforms ......... ..................... 23 Yung Whee Rhee is a principal economist in the Industry Development Division, Industry and Ener