The PSRL was originally supposed to also replace the $400-million Banking Sector Reform Loan (BSRL) which expired last June. Government decided not to pursue its renewal after failing to comply with the loan’s conditionalities.
Finance Undersecretary Juanita Amatong said government is still pushing for the $400-million loan but will pursue it in phases.
"We are trying to unbundle the public sector loan and so initially the amount we will be asking for with the World Bank is $200 million," Amatong said.
Amatong said the conditions attached to Phase I of the PFRL will involve reforms in budget management, procurement procedures which should be easy to comply with since government is already implementing most of the recommended measures.
Phase II would also involve additional implementation of public sector reform measures.
The government expects WB to approve the loan within six months and the single tranche, front-ended release of the loan is also seen to take place within the first semester of 2002.
Amatong said government may also consider asking for a co-financing for the $200-million loan. "We are looking at a co-financing scheme, possibly with the Japan Bank for International Cooperation (JBIC) or the Asian Development Bank," Amatong said.
JBIC co-financed the original BSRL with the WB which means that as co-financier, it will match the loan released by the primary lender.
Of the $200-million expired BSRL, JBIC matched the first $100-million tranche released by WB.
Amatong said the disbursement of the PFRL this year is not necessary since government has already arranged for a $500-million foreign financing through private placements that will take care of government’s major financing requirements this year.
The BSRL loan called for the full privatization and rehabilitation of PNB as well as the strengthening of the charter of the Bangko Sentral ng Pilipinas and the Philippine Deposit Insurance Corp. It also set as a condition the passage of an anti-money laundering law, which has not yet been accomplished.