Announcement of Twelve Million Five Hundred Thousand US Dollars Loan for Agriculture in the Philippines on June 4, 1969

FOR IMMEDIATE;>RELEASE 'It 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 69/34 Subject: $12.5 million loan for June 4, 1969 agriculture in the Philippines A World Bank loan equivalent to $12.5 million, announced today, will provide half the funds needed over the next three years for a rural credit project to in- crease agricultural production in the Philippines. The project is a continuation af an agricultural credit program that was supported by a loan of $5 million made by the Bank in 1965. Under the project, fanners will be offered medium- and long-term loans for buying farm machinery and equipment, and for livestock and fishery development. • l\s a result, it is expected that more rice, sugar cane, p/.>rd,:, poultry and fish, valued at some $29 million, will be produced annually. The net amount of foreign exchange saved or earned could be as much as $13 million per year. Approximately 7,000 beneficiaries engaged in farming, fishing and related activities are ex- p~cted to participate in the project. The World Bank loan is being made to the Central Bank of the Philippines. The Central Bank will relend the proceeds of the loan, along with funds from other sources, to qualified rural banks. The rural banks, in turn, will make loans for periods ranging from three to ten years to farmers for specified pur- poses. The World Bank loan will be guaranteed by the Republic of the Philippines. It will be for a term of 14 years, including a four~year grace period, and car- • ries interes.t at 6-1/2%. The Fidelity Bank, Philadelphia is participating in the loan to the extent of $50,000. /more  Bank P.P.. No. 69/34 - Philippines-Agriculture - 2 - The total estimated cost of the project is equivalent to $25 million, of which half will be required in foreign exchange and covered by the World Bank loan. The Central Bank of the Philippines will provide $7.5 million from other sources; the remaining $5 million is expected to come from the rural banks and the beneficiaries. In recent years, agricultural output in the Philippines, principally rice and corn, has shown very L~pressive gains, and the country may soon be- come a net exporter of rice. Better coordination among government agencies, an<l a larger supply of credit for buying the inputs used in association with improved plant varieties, have contributed significantly to the increase in production. The Philippine Government plans to maintain the momentum of • agricultural development by providing more credit and other forms of assist- ance to farmers. Since about two-thirds of the country's population depends for its livelihuod on agriculture and related activities, the increase in farmers' incomes will benefit the economy considerably. A specialist from the Food and Agriculture Organization of the United Nations (FAO) participated in the appraisal of this project under the Bank/FAQ Cooperative Program. - 0 - •