MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has approved in principle the proposed P300-million loan by the Marikina City government from the International Finance Corp. (IFC) to bankroll the reconstruction and rehabilitation of the damages caused by tropical storm Ondoy.
BSP Governor Amando Tetangco Jr. said the Monetary Board (MB) has given the greenlight to the Marikina City government to pursue the loan from the unit of multilateral lender World Bank (WB).
Proceeds of the loan would be used by the city government to finance its general infrastructure program aimed at reconstructing and rehabilitating damages caused by the deadly flood that hit Marikina during the height of typhoon Ondoy.
Tetangco said projects to be funded by the IFC loan include the proposed Marikina dike project as well as the construction of the Pamantasan ng Lungsod ng Marikina.
The loan would carry a Philippine-peso fixed interest rate plus a 2.6-percent spread. It is payable semi-annually for a period of 10 years.
This would be the first time that IFC would extend loans to a city government or a local government unit. The private investment arm of the WB normally extends loans to private companies.
IFC last year successfully raised P5 billion from the issuance of five-year peso-denominated bonds.
IFC resident representative Jesse Ang earlier announced that it plans to lend nearly a billion dollar for over three years to Philippine business companies.
For fiscal year 2010 to 2012 that starts every June, IFC committed to lend private companies engaged mainly in infrastructure, power, renewable energy, agribusiness, and financial sectors $ 300 million a year.
IFC has invested $480 million in the Philippine power sector as of last year.
The Philippines ranked second among IFC’s exposures in the East Asia and Pacific Region as of June 2008 with about $898 million in 32 projects.
IFC vowed to continue investing significantly in infrastructure, agribusiness, and loans to micro, small, and medium enterprises in the Philippines.
It is also providing investment and advisory services to promote lending to micro, small, and medium enterprises, to design a credit information corporation, and to introduce an energy efficiency and renewable energy financing program.