IFC-Washington D.C.:
Desmond Dodd
Phone:  (202) 473-7194
Fax:(202) 974-4384
E-mail: ddodd@ifc.org

IFC-Manila:
Erwein Catoto
Phone:  (632) 848-7333
Fax:  (632) 848-7339
E-mail:  ecatoto@ifc.org


Washington D.C., December 19, 2002—The International Finance Corporation (IFC), the private sector development arm of the World Bank Group, today signed an agreement to form a partnership with Hongkong and Shanghai Banking Corporation Limited (HSBC), that will establish the US$20 million Philippine Trade Facility (PTF). The facility will provide medium-sized private local banks active in import trade with access to increased confirmation limits for letters of credit (LCs) issued by them.

IFC and HSBC have initially selected Asia United Bank and East West Banking Corporation to participate in the new facility. Asia United Bank President Abraham Co and East West Bank President Elrey Ramos also signed their respective tripartite framework agreements today.

Under the PTF, IFC will guarantee 40 percent of the incremental confirmation facility, enhancing the capability of the selected banks to carry out international trade transactions. HSBC will take the remaining 60 percent risk.

This trade enhancement program was developed by IFC to assist medium-sized commercial banks secure higher credit limits for the issuance of confirmed LCs. IFC has entered into similar agreements with partner banks in Bangladesh, Indonesia, Korea, and Pakistan. The PTF is the seventh trade facility put in place by IFC since 1997. These facilities are extended to banks whose financial conditions exhibit growth potential in financing trade.

HSBC Chief Executive Officer Warner Manning said, “We are pleased to work with IFC on this program that aims to develop a robust trade services business in the country by supporting select banks that are trade-focused.”

IFC Country Manager Vipul Bhagat, said, “The establishment of the Philippine Trade Facility with HSBC is a significant milestone in our work in the Philippines. The participation of mid-market banks will play a strong role in increasing the availability of trade finance to importers and exporters. It is particularly important to maintain trade flows since they contribute significantly to the level of economic activity in the country. IFC is playing a catalytic role in this transaction by mobilizing financing through risk mitigation and credit enhancement and is demonstrating its continuing confidence in the banking sector.”

HSBC is the founding and a principal member of the HSBC Group. With over 7,000 offices in 81 countries and territories and assets of $746 billion as of June 30, 2002, HSBC Group is one of the world’s largest banking and financial services organizations.

IFC has been active in the Philippines for over 25 years. Its financial commitments in the country amounted to $1.1 billion for IFC’s own account and $696 million in loan syndications. These investments involve 70 projects in sectors as diverse as energy, infrastructure, financial markets, agribusiness, health care, manufacturing, and tourism.

IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.