Announcement of Twenty-Five Million US Dollars Loan in the Philippines on July 2, 1969

INTERNATIONAL BANK FbR ,· . " RECONSTRUCTION AND DEVELOPMENT 1818 H 5''.TREET, N.W., WASHIN:GTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 -----------------------------------··-----------,.- Bank Press Release No. 69/54 Subjetft: $25 million loan iri the Philippines July 2, 1969 '~ .... \ The World Bank has approved a loan equivalent to $25 million to the Philip- pine National. Bank ~or relending to the Private Development Corporation of the Philippines (PDCP). The loan will be used by PDCP to finance foreign exchange co.~ts of specific projects undertaken by private productive enterprises for the economic development of the Philippines. PDCP _was ,1established in 1963 with assistance from the World Bank and its af- filiate, th~ Internatd.ona.l Finance Corporation. At that time the World Bank made ••• a loan of $15 million and the IFC subscribed 800,000 pesos (equivalent to $205,128) to its share capital; in addition, PDCP received a peso ·1oan of P 27.5 million i''( ($7.1 million) from the United States Agency .for International Development. PDCP was the beneficiary of a second World Bank loan of $25 million in September 1966, and of an Asian Development Bank'loan of $5 million in March 1969. PDCP has now committed most of its foreign exchange resources and the· new Bank loan will meet its foreign exchange needs for about the next two years. PDCP has been assisting in the creation, expansion and modernization of pri.- vate productive enterprises in the Philippines. It has also encouraged participa- tion of foreign and domestic private capital in development, and helped to de- velop the Philippine capital market.· PDCP has lent mainly to the manufacturing sector, :which accounted for 47% of total loan approvals by the end of 1968. Among the,. manufacturing industries, cement, ceramics and stone products accounted for /more Bank Press Release No. 69/54 - 2 - PM.li:ppines - PDCP 13% of the total, and the remainder: were food, chemicals, wood and wood products. Outside the manufacturing sector, electricity claimed 22% of the totat, transpor-ta- tion 16% and mining and agriculture 8%. Seventy-one out of a total of 99'projects financed by PDCP were for expansion or modernization· of existing enterprises. The remainder were for new ventures. In the context of the P~\ilippine economy, PDCP is still a small ins ti tut ion and its contribution to the economy is, as-yet, relatively modest. ~ut its ri~ nancial and technical guida.qce has been of value to the business community, and /( among Philippine· financ.ial. ..insti.tu..t.jnniLp..rorld:.i_ng long-term loans for private in- vestment, PDCP has rapidly gained importance. efficient and useful organization and has contributed to sound industrial growth by PDCP has established itself' its assistance in the preparation and appraisal of' private industrial projects. as an ~·- .• As its resources are augmented, PDCP will have the opportunity of becoming a more important source of finance for private industry. The World Bank loan will. bear interest at the rate of 6-1/2% per annum. It will be guaranteed by the Government of .-the Philippines. Repayments to the World Bank will conform approximately to repayments received by PDCP on its sub-loans and investments financed out of Bank funds, which will not extend for periods I beyond 17 years. - 0 - (/