"This coming year, we hope to do $120 to $130 million," said Vipul Bhagat, IFC’s country manager. "We could easily increase that amount if economic conditions are favorable.’’
IFC, a unit of the World Bank, committed $102 million of funds to the Philippines this year. That includes the equivalent of $15 million in peso loans to power producer Cagayan Electric Power & Light Co., its first local currency credit in the country. In June, IFC lent P2.25 billion ($40 million) to Filinvest Land Inc., the nation’s largest builder of low-cost homes.
Lending to Philippine companies will help spur economic growth, creating jobs in a nation with the highest jobless rate in the Asia-Pacific region and where a third of its 85 million people live on less than 60 US cents a day.
The government expects the economy to grow as little as 5.7 percent next year from 5.3 percent this year, boosted by consumer spending and farm output.
The World Bank on Sept. 14 said its annual loans to the Philippines may grow nearly fivefold to $600 million in the next three years. It provided $130 million of loans this year.
Under the government’s financing plan for this year and 2006, it will raise about $900 million through loans from the World Bank and other international financial institutions. Another $3.1 billion will come from selling bonds overseas.
Meanwhile, the IFC said it is supporting the Philippine banking system’s consolidation efforts.
"We support mergers and acquisitions in the country’s commercial banking system," Bhagat said.
The IFC has a seven-percent equity stake in Banco de Oro. It also has substantial equity exposures with the Planters Development Bank and the MicroEnterprise Bank, based in Mindanao.
IFC also has investments in Paramount Life and General Insurance Corp., National Home Mortgage Finance Corp., Manila Water Corp., Cagayan Electric Power and Light Co., Eastwood Cyber One Corp., and Filinvest Land Corp.
Likewise, the IFC is also throwing its support for the development of the capital markets, the full implementation of the securitization law, and the formation of the country’s first independent and private-sector driven credit bureau. – Ted Torres