WORLD BANK EXPECTED TO APPROVE PHILIPPINES LOAN
The World Bank is expected to approve a
310 mln dlr economic recovery loan for the Philippines at a
meeting of its executive board today in Washington, Central
Bank sources said.
    The sources said the loan, agreed upon in principle last
September during a visit to the United States by President
Corazon Aquino, had been held up by Philippine government
delays in fulfilling key conditions.
    They said the documents required by the World Bank were not
submitted by Manila until late February.
    The sources said the loan is needed to rehabilitate the the
state-owned Philippine National Bank (PNB) and the Development
Bank of the Philippines (DBP), which together are burdened with
seven billion dlrs of non-performing assets.
    They said the World Bank had insisted the two banks appoint
independent auditors and draft revised charters.
    It also laid down several conditions for an Asset
Privatisation Trust (APT) planned by the government to dispose
of the banks' unproductive assets, the sources said.
    The APT, set up in January, is headed by banker and
businessman David SyCip.
    The sources said the World Bank wanted respected private
sector individuals to be appointed to the APT, and immunity
from prosecution for the trust. It wanted a clause saying
buyers of non-performing assets could not be prosecuted.
    The Manila Standard newspaper quoted Rolando Arrivillaga,
World Bank representative in the Philippines, as saying the
loan would be in three 100 mln dlr tranches. The first tranche
would be available late this month or in early April.
    Arrivillaga said the remaining 10 mln dlrs was in the form
of technical assistance available for disbursement during a
36-month period.
    Finance Secretary Jaime Ongpin has said approval of the
loan will trigger another 300 mln dlr loan expected from the
Export-Import Bank of Japan.
    The Central Bank sources said negotiations would start in
April on another 150 mln dlr loan from the World Bank to
implement reforms in the government corporate sector.
    The sources said the World Bank is expected to approve the
loan by August, after a review of the government's
non-financial institutions. The government's 14 major
corporations rely heavily on budgetary support to supplement
external borrowing to meet their yearly revenue shortfalls.
 REUTER
