Announcement of World Bank to Support the Philippines Six Hundred Million Dollars Textile Restructuring Program on April 22, 1982

0 'FOR IMMEDIATE RELEASE 0 ·.• World Bank !,· 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.•Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 82/77 Contact: Sundaram Sankaran Apr i 1 22 , 1982 (202) 477-3962 WORLD BANK TO SUPPORT THE PH I UPP INES $600 MILLI ON TEXTILE RESTRUCTURING PROGRAM The Philippines will implement a $600 million program to restructure its textiile industry with the assistance of a World Bank loan of $157.4 mi 11 ion. The fot1r-year program wi 11 help the industry lower costs, improve efficiency, and increase competitiveness. The textile reitructuring program is part of the government's effort to improve the growth of industry, expand employment, and develop industry outside the metropolitan Manila area. A number of pol icy changes, including tariff reductions, import liberalization, export promotion, and investment incentives, have been initiated to help reach these objectives. A major portion of the World Bank loan, $150 million, will be channelled to individual textile projects through the Development Bank of the Philippines (DBP), a government-owned finance company. Approval by the joint evaluation • unit of the DBP and the Board of Investments (801) of the Ministry of Trade and Industry is a prerequisite for obtaining credit from the DBP. Projects to be assisted with DBP funds will involve the physical rehabili- tation, modernization, and expansion of spinning, weaving, knitting, and finishing facilities. Approval will be given to those projects whi~h meet the criteri~ of the restructuring program, especially those which will result in greater specialization by process or product, and those plan'ried to reach a specified economic size. Individual mills will be assisted to undertake changes through plans to improve productivity and operations. The 801/DBP evaluation unit will monitor projects, with the help of technical consultants, to ensure that progress goes according to plan and to evaluate the impact of the program. Technical assistance will be Rrovided to the joint evaluation unit, particularly for market analysis, te2~nical appraisal, capital cost estimation, evaluation of operations, industry le~~l training, and monitoring. Separate training programs for managers, supervisors, technicians, and operators of participating mills will be prepared and studies to improve the performance of the industry, especially in areas of energy conservation and environmental impact, will be carried out. The World Bank loan is for 20 years, including five years of grace, with interest at 11 .6% a year; the loan also carries an annual commitment charge of •• 0.75% on undisbursed balances, and includes a front-end fee of 1.5% on the amount of the loan. NOTE: Money figures are expressed in U.S. dollar equivalents. (, . ·-· ..