Standard Chartered open to PPP program funding

MANILA, Philippines -  Standard Chartered Bank of the Philippines (SCBP) said it is open to joining the Public-Private Partnership (PPP) program of the Aquino administration as a funding source.

SCBP chief executive Mahendra Gursahani said they can participate in the capital markets, especially involving PPP projects, as they expect several banks, both foreign and domestic, to form consortiums or partnerships to fund high-capitalized projects.

He explained that most financial players are either not in the position to take on projects or would prefer to spread out the risk of funding huge projects, especially in the infrastructure sector.

Moreover, local banks have existing barriers such as the single borrowers limit (SBL), which makes it logical to form consortiums. Likewise, infrastructure projects have long gestation or repayment periods thus making it unattractive to a single institution.

“We are interested in the areas of transportation, power and tourism,” Gursahani told reporters yesterday.

The bank official said that they are also in a position to introduce their regional or global clients to proponents of PPP projects.

Meanwhile, Gursahani said SCBP would not pursue plans to put up a thrift bank similar to those of counterparts Hongkong and Shanghai Banking Corp. (HSBC) and Citi.

“We prefer to grow organically, we will just leverage on what we do best,” the SCBP chief executive said. “Instead of competing with those who have the advantage, we would rather offer all banking services with our existing corporate and consumer markets.”

One of these services is trade financing by providing direct capital or guarantees or forming partnerships with financial and non-financial institutions. It has already partnered with the International Finance Corp. (IFC), the private investment arm of the World Bank, in domestic and regional trade.

SCBP and IFC entered intoa $1-billion unfunded risk participation arrangement trade finance in emerging markets.

The SCBP also assisted domestic banks in the emerging markets to extend trade financing to their importer and exporter clients. In turn, the IFC would serve as the guarantor for the portfolio, thus providing credit protection and capital relief on the portfolio over three and a half years.