International Finance Corp. expects to extend up to $250 million in loans to the Philippines in the fiscal year ending June 2013, saying it is keen on providing credit support for Filipino firms in the financial and infrastructure sectors.
IFC, the investment arm of the World Bank, said it was eager to help the country achieve its infrastructure-development goals by providing loans to enterprises investing in projects under the public-private partnership (PPP) program.
IFC also wants to extend loans to Philippine banks to help them meet the higher capitalization requirements under Basel 3, which will be implemented by 2014. Basel 3 is an updated set of international standards on bank regulation that calls for better quality of capital among banks.
Jesse Ang, IFC’s country head for the Philippines, said IFC’s loans to the Philippines over the past five years were expected to hit the higher end of the $200-million to $250-million loan range by the end of the fiscal year ending June 2013.
Ang said IFC was elated that several PPP projects were already moving, with bidding and other preparations being done by the government. He cited the Light Rail Transit extension and the Naia Expressway projects as among those that IFC would likely support, particularly through loans to the private-sector investors.
Under the PPP program, the government invites private firms to invest in public infrastructure projects. The objective is to help achieve the country’s need for infrastructure development even as the national government remains confronted with budgetary constraints.
Public infrastructure spending in the Philippines is estimated to be below 3 percent of the country’s gross domestic product, much lower than the average 5 percent in Southeast Asia.—Michelle V. Remo