Announcement of Fourteen Million Three Hundred Thousand US Dollars Loan for a Rice Processing and Storage Project in the Philippines on January 28, 1971

G lf\JTERNATIONAL BANK FOR •RFCONSTRucT10N AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE .3-6360 Bank Press Release No. 71/6 Subject: $14.3 million loan for a rice January 28, 1971 -;processing l) ·/! and storage project · in the Philippines · A World Bank loan of $14. 3 million will help sustain the technological? \\ )) breakthrough in /~t._ce ;' ~~"" production which has been achieved in the Philippines. " \ ...._ ·1 \ The loan is betng··-mJde for the establishment of modern, privately-owned rice processing and storage ~its in major rice-growing areas. (j Besides adding to milling,capacity, reducing grain spoilage, and increas- ing the efficiency of paddy and grain processing, the project is expected to • strengthen the marketing position of rice £,armers, many of whom are small scale producers, by providing more secure outlets for their increasing production. Rice is the st~ple food for about three-fourths of the Philippines' l.l app.roximately 39 million people. The Philippines is nearing food grain self- sufficiency, mainly as a result of the increasing use of new high-yielding 0 rice varieties and Government policies supporting this technological change. The new varieties~ developed at the International Rice Research Institute in Los Banos, Philippines, were introduced to farmers in the mid-1960s and were rapidly accepted in areas of assured 11water supply. Since the new varieties mature early and, in some cases, must be harvest·ed before the end of the wet season, resulting production increases have underscored the need for mechanized drying, i~proved milling equipment and bulk handling and storage units. • ';,. r/_f) It is expected that about six large integrated rice processing units, each providing about S, 000 tons of bulk storage·, and 60 small units, each providing about 2,000 tons of bulk storage, will be set up under the project. /more  Bank P.R. No. 71/6 - Philippines - rice processing (1 - 2 - 11 These mits will be equipped with modem milling 5 dryi.n,g an4 storage equipment and will have complementary sack warehousing and ancillary handling, aeration • . and transportation equipment. I', The mechanical drying equipment will allow millers to accept increased quanti,ties of wet paddy, which then can be dried without delay, and the storage units will help stabilize in~er-seasonai farm prices. Altogether, the units <:::;:------; are expected to handle about 480,000 tons of paddy a year ana~-'to produce 332,000 ~~ tons of milled ?71ce, valued at between $30 and $40 ,ndllion. Trainlri for '\.....anage- ~; '\, ,:/' ment and operating personnel.,of the units will be provided unde~r/the project. )) // The B~nk loan will be made to the Republic of the_ Philippines for a term of 19 year~, including four years of grace, at.an ·interest rate of,7-1/4% • . It is expected to cover foreign exchange expenditures under the project, the total costs of which are estimated to be the equivalent of $20.9 million. The Government will relend the proceeds of the loan on the same terms to the Develfopment Bank of the Philippines (DBP) which will be responsible • for administering the project. In its turn DBP will make long-term sub-loans to qualified grain millers and traders in the private sector to cover the (( foreign exchange cos~s of their indivudual sub-projects. DBP will also make loans from its own resources to ~inance part of the local currency costs of sub-projects. All loans under the project for construction of individual sub-proj.ects will be payable in 14 years, including a grace period of about one year, and will bear an interest rate of 11%. ~ "\ A special Grain Processing Section will,, be set up i~ the DBP to implement ~~ the project. Consultants' services to assis~ the Grain Processing Section in carrying out the project will also be provided. Riggs National Bank of Washington, D.C. is taking $100,000 of this loan. ? -o-