L. Joseph
Phone: (202) 473-7700
Fax: (202) 974-4384
E-mail: ljoseph@ifc.org


WASHINGTON, D.C. April 16 -- As part of its response to the financial crisis in Asia, the International Finance Corporation has approved debt financing of US$60 million to the Far East Bank and Trust Company (FEBTC), a leading Philippine banking institution.

The financing will help FEBTC expand its operations in support of local private enterprises and infrastructure projects in the Philippines.  It will also improve operating policies and procedures and raise disclosure and transparency standards to international levels.  The project will contribute to FEBTC’s institutional strength by providing incentives to obtain and maintain an international credit rating, adopt stricter provisioning policies, and conduct prudent and well defined risk management policies for its financial derivatives business.  As part of the project appraisal, IFC reviewed the systemic risks and issues in the Philippine banking sector with the help of an independent consultant.

The Philippine government attaches great importance to strengthening the financial sector through the promotion of sound banking practices.   This project will help develop standards and practices that can be emulated by other institutions and also build confidence in the financial sector.

IFC’s financing consists of a loan for its own account of  US$45 million and a loan for the account of participants of up to US$15 million.

FEBTC asked IFC to arrange the current transaction, which is a follow-up of a US$75 million IFC credit line to FEBTC committed on September 15, 1997.  To date,  US$61 million of that credit line has been disbursed.

FEBTC, which was established in 1960, has a strong position in the Philippine banking sector.  It has been a pacesetter in the local financial market and now ranks as the fifth largest private commercial bank in the Philippines.  FEBTC operates a nationwide network of about 250 branches and engages in both commercial banking and investment banking activities.  At year-end 1997, it had total assets of about US$3.8 billion.

IFC, part of the World Bank group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.