Economy of Philippines, International Finance Corporation (IFC), IFC Projects, IFC in Phillipines, Role of IFC for Economic Growth of Philippines.

1. CONTRIBUTION OF IFC FOR THE
GROWTH OF PHILIPPINES ECONOMY
Group Members:
Anshaj Shrestha
Bipin Gurung
Dipesh Raj Pandey
Ganesh Gurung
Sauharda Kushal
Sanjay Gautam
Year - 2015

2. ECONOMY OF PHILIPPINES
 The Philippines is one of the most dynamic
economies in the East Asia region, with
sound economic fundamentals and a globally
recognized competitive workforce. Growth in
the Philippines has been averaged above
5% in the past decade, significantly higher
than in the previous decades.

3. ECONOMY OF PHILIPPINES
 The country has earned investment grade ratings from major
credit rating agencies as a result of its sound macroeconomic
fundamentals. It is increasingly characterized by robust inclusive
economic growth, low and stable inflation, healthy current
account surplus, more-than-adequate international reserves, and
a sustainable fiscal position – a combination never before seen in
its history. However, with GDP growth having reached its
potential, the country should make use of its sound fiscal position
to fund much needed infrastructure to sustain high growth in the
following decades.
 With a solid macro economy that has proven to be resilient to
some major shocks, the country can now focus its attention on
implementing crucial structural reforms that can sustain inclusive
growth, create more and better jobs, and eradicate extreme
poverty.

4. ECONOMY OF PHILIPPINES
 The Philippines’ macroeconomic performance
improved notably under President Benigno Aquino III.
His term, which started in 2010, has been
characterized by strong GDP growth, an anti-
corruption drive, increased foreign investment, fiscal
stabilization, infrastructure development as well as
strong performance in the manufacturing, agriculture
and business-outsourcing sectors. As the constitution
allows Aquino to serve only one term, all eyes are on
the upcoming 9 May presidential elections and on the
transition in government. The key concern is whether
Aquino’s successor will be able to keep up strong
economic growth and governance.

5. 2015
Population (million) 101
GDP per capita (USD) 2,877
GDP (USD bn) 292
Economic Growth (GDP, annual variation in %) 5.8
Consumption (annual variation in %) 6.2
Investment (annual variation in %) 14.0
Manufacturing (annual variation in %) 5.7
Unemployment Rate 6.3
Inflation Rate (CPI, annual variation in %) 1.4
Exchange Rate (vs. USD) 46.93
Exports (USD billion) 58.6
ECONOMIC PROFILE
http://www.focuseconomics.com/countries/philippines

6. INTERNATIONAL FINANCE CORPORATION (IFC)
 The International Finance Corporation (IFC) is an international financial
institution that offers investment, advisory, and asset
management services to encourage private sector
development in developing countries. The IFC is a member of the World
Bank Group and is headquartered in Washington, D.C., United States. It
was established in 1956 as the private sector arm of the World Bank
Group to advance economic development by investing in strictly for-
profit and commercial projects that purport to reduce poverty and
promote development. The IFC's stated aim is to create opportunities for
people to escape poverty and achieve better living standards by
mobilizing financial resources for private enterprise, promoting
accessible and competitive markets, supporting businesses and other
private sector entities, and creating jobs and delivering necessary
services to those who are poverty-stricken or otherwise vulnerable.

7. IFC
PROJECTS

8. IFC PROJECTS (MITIGATING CLIMATE CHANGE)
 IFC is helping to scale up lending for projects in
renewable energy, energy efficiency, and climate-
change mitigation by advising and providing risk
guarantees to its partner banks to support their loans.
 IFC is supporting a 180-megawatt solar-and-biomass
plant investment on the island of Negros in central
Philippines.
 To promote energy efficiency, IFC supported
Mandaluyong City in Metro Manila in drafting a green-
building ordinance that requires new buildings to
adopt environmentally friendly features.

9. IFC PROJECTS (SUPPORTING PUBLIC-PRIVATE
PARTNERSHIP PROJECTS)
 IFC helps the government and private
investors collaborate on financing and
executing major infrastructure projects.
 It supports public-private partnerships by
advising on bids to build a toll expressway
connecting the three terminals of the
country’s principal airport and a 12-kilometer
extension of a Metro Manila train line.

10. IFC PROJECTS (SUPPORTING AGRIBUSINESS)
 The World Bank Group supports
agribusiness investments in the Bangsamoro
region in southern Philippines to promote
agricultural development and create jobs.
 IFC is helping the Department of Agriculture
to improve import-export procedures to
reduce the costs of agricultural products and
enhance the competitiveness of the
agricultural sector.

11. IFC PROJECTS (EXPANDING FINANCING)
 IFC supports banks to expand their lending to
farmers and micro, small, and women-led
enterprises.
 IFC is helping to attract more investments for
entrepreneurs in Tacloban and other cities struck by
Typhoon Haiyan; it is also supporting the
development of affordable agro-insurance products
that will quickly reimburse farmers struck by typhoons
and other natural disasters for their losses.
 IFC has been advising the government on the
establishment of a credit bureau to improve access to
credit for small business owners and individual
borrowers.

12. IFC PROJECTS (ENHANCING TRADE AND
COMPETITIVENESS)
 IFC advises the government on improving laws
and regulations to create a more business-
friendly environment in the Philippines to attract
more investments.
 IFC has been supporting the Transportation and
Communications Department to streamline the
registration and licensing procedures for
commercial ships to open up competition in the
shipping sector, reduce logistics costs and
ultimately reduce the price of goods.

13. IFC PROJECTS (TAILORED ADVICE – ADDING
VALUE BEYOND FINANCING)
 Business regulation enhancements
 Corporate governance and risk management
 Public-private partnerships
 SME banking
 Sustainable energy advisory
 Supply chain management

14. IFC PROJECTS (FINANCIAL PRODUCTS)
 Loans
 Equity/Quasi-equity investments
 Investments in equity and
 debt funds
 Syndications
 Structured finance
 Risk guarantees
 Trade finance

15. IFC PROJECTS (IFC AND MANILA WATER WORK
TOGETHER TO EXPAND SUPPLY TO METRO MANILA
RESIDENTS)
 Between the 1960s and late 1990s, most Manila homes of
Philippines had little or no water supply. People had to queue up at
public faucets until the wee hours of the morning, or buy water
from water trucks at exorbitant prices. Much of the water was
contaminated, so gastrointestinal diseases were common,
especially among children.
 But, that all changed when Manila Water Company won a
concession contract for the East Zone under the privatization
project of the Manila Waterworks and Sewerage System in 1997,
with public-private partnership advisory support from IFC. At the
time, only one in five homes had water all day and more than half
of the water was lost to leaking pipes, theft, or vandalism. Since
Manila Water began operating a concession contract for East
Manila 15 years ago, the company has brought clean and
affordable water to nearly 6.2 million customers so far, doubling the
number of people it used to serve.

16. IFC PROJECTS (IFC AND MANILA WATER WORK
TOGETHER TO EXPAND SUPPLY TO METRO MANILA
RESIDENTS)
 To help Manila Water achieve this, IFC first extended $60 million in
long-term debt financing to the company in 2003 and another $15
million in equity in 2005. Just last month, IFC again provided a $100
million loan to help the company expand water supply and
wastewater treatment services for the East Zone servicing 23 towns
and cities in and around Metro Manila.
 The loan is an anchor investment in Manila Water’s $1.5 billion
capital expenditure budget for 2013-17 and is expected to generate
18,000 jobs, fund new water sources for 50 million liters per day and
expand facilities for treating up to 144 million liters of water per day.
 Now, 27 percent of the customers served by Manila Water are poor
families. Water losses have been brought down to 12 percent from
62 percent, more than 4,600 kilometers of pipelines have been
installed, and 39 wastewater facilities were constructed.

17. IFC PROJECTS (POWERING PROGRESS)
 For many years, residents of the northern Philippine city
of Olongapo suffered frequent power outages. But as
Olongapo began attracting international investments in
the late 1990s, reliable electricity became even more
vital.
 To improve electricity supply for about 200,000 residents
and maintain the city’s competitiveness, the Olongapo
City government brought in IFC in 2008 to advise on the
privatization of its electricity distribution system as public-
private partnerships ease the burden on taxpayers and
spread a project’s risk and reward. At the same time,
communities benefit from high-quality services. IFC
assisted in the preparation, design, and implementation of
a transaction that involved private sector investors.

18. IFC PROJECTS (POWERING PROGRESS)
 In 2010, under the assistance of IFC, Olongapo sold its electricity
distribution system for $13.3 million to Cagayan Electric Power and
Light Co. Inc., one of the largest electricity-distribution companies in
the Philippines. Cepalco, another electricity company, also agreed to
invest $2 million for system repairs and upgrades during the
transition period and another $11 million over five years. The
upgrades have helped to reduce some 3,600 tons of carbon dioxide
emissions in Olongapo annually since 2011.
 Olongapo Mayor James Gordon Jr. says that public-private
partnership deal for Olongapo’s power system which was done with
the assistance of IFC addresses local people and businesses’
demand for a reliable supply of electricity. He also adds that
modernization and improved services can be achieved only through
private sector management due to the limited resources of the
government.

19. IFC PROJECTS (POWERING PROGRESS)
 IFC also helped the Philippine government attract private investments in off-
grid power generation in rural areas. In Indonesia, where power shortages
threaten to curtail industrial growth, IFC helped develop the first
independent power project in more than 10 years. It advised Perusahaan
Listrik Negara, the state-owned power utility, to grant a private company the
rights to build and operate the Central Java Power Plant. It was the first
infrastructure project to be put out to tender under the country’s new public-
private partnership law.
 A Japanese-Indonesian consortium among J-Power, Itochu Corp., and
Adaro Power won the bid for a 25-year contract to build, own, operate and
transfer the new facility. The project will help ease power shortages on
Indonesia’s main island of Java by generating 2,000 megawatts of electricity
and improve access to electricity for 8 million residents by 2016.
 Due to the help from IFC, the private sectors will have plenty of
opportunities to shoulder the risks and enjoy the rewards in the country’s
fast-growing economy while ensuring affordable, high quality power for its
people.

20. IFC PROJECTS (SUPPORT GROWTH ENGINES)
 Nolie and Rogelio Estocado wanted to provide for the growing
needs of their family by reviving an old Christmas and seasonal
decoration-making business that had fallen on hard times.
However, finding affordable capital can be tough.
 The couple turned to the Center of Agriculture and Rural
Development (CARD), a microfinance pioneer that wants to
expand its reach among small and medium enterprises in the
Philippines. IFC Advisory Services helped the company establish
CARD SME Bank to serve the needs of small companies
exclusively.
 After receiving a 4,000 Philippine-peso loan (about $100) and
training from the bank, the Estocados managed to build a small
factory employing 60 workers. They were then able to borrow
more money to meet larger orders, source better-quality
materials, and hire more workers – many of them women.

21. IFC PROJECTS (SUPPORT GROWTH ENGINES)
 Small and medium enterprises account for more than 90 percent of registered
businesses in the Philippines. In 2010 and 2011, IFC provided more than 6
million loans to micro, small and medium enterprises in East Asia and the
Pacific. This in turn catalyzes job creation and economic growth.
 That’s why IFC has invested in and provided expert advice to financial
institutions serving this sector. In the Mekong region, ACLEDA Bank used IFC’s
early equity investment to support small businesses in Lao PDR.
 Khamsaveng Southichak in Vientiane borrowed $25,000 from the bank to
expand his cement pole-production business in 2010.
 Serving small entrepreneurs has also been a winning business strategy for
Xacbank in Mongolia: They accounted for half of the bank’s loan portfolio as of
end of June 2011.
 IFC’s loans and equity investment have helped the bank expand its products
from microfinance to trade finance. Xacbank is looking to replicate its success
with small and medium enterprises in China and neighboring Central Asian
states.

22. 2011 2012 2013 2014 2015
Population (million) 94.2 95.8 97.5 99.4 101
GDP per capita (USD) 2,381 2,612 2,788 2,864 2,877
GDP (USD bn) 224 250 272 285 292
Economic Growth (GDP, annual variation in
%)
3.7 6.7 7.1 6.1 5.8
Consumption (annual variation in %) 5.6 6.6 5.6 5.4 6.2
Investment (annual variation in %) -1.9 10.8 12.2 6.8 14.0
Manufacturing (annual variation in %) 4.7 5.4 10.3 8.3 5.7
Unemployment Rate 7.0 7.0 7.1 6.8 6.3
Inflation Rate (CPI, annual variation in %) 4.7 3.2 2.9 4.2 1.4
Exchange Rate (vs. USD) 43.84 41.06 44.39 44.79 46.93
Current Account (% of GDP) 2.5 2.8 4.2 3.8 -
Current Account Balance (USD bn) 5.6 6.9 11.4 10.9 -
Trade Balance (USD billion) -12.2 -10.0 -5.7 -3.3 -
Exports (USD billion) 48.3 52.1 56.7 62.1 58.6
Imports (USD billion) 60.5 62.1 62.4 65.4 -
International Reserves (USD) 75.3 83.8 83.2 79.5 80.7
External Debt (% of GDP) 33.7 32.0 28.9 27.3 -
ECONOMIC GROWTH OF PHILIPPINES
http://www.focuseconomics.com/countries/philippines

23. IFC IN PHILIPPINES
 IFC is supporting in the sustainable
development of Philippines by helping attract
international investors to sectors such as
infrastructure and public utilities, financial
institutions, and agribusinesses. It provides
loans and equity investments to private sector
companies, including small and medium
enterprises with growth potential, and mobilizes
financing from other sources. IFC also advises
firms and the government on how to enhance
businesses’ competitiveness.

24. IFC IN PHILIPPINES
 Since 1962, IFC has invested more than $3
billion in equity and loans for more than 100
private sector companies. It has expanded its
access to finance and infrastructure, facilitated
public-private partnerships, improved the
investment climate, mitigated climate change,
and supported agribusinesses. IFC’s unique
financing and advisory products combine global
expertise with local knowledge, maximizing
investment returns and social benefits.

25. CONCLUSION (ROLE OF IFC FOR ECONOMIC
GROWTH OF PHILIPPINES)
 IFC has helped to foster economic growth in Philippines by promoting
private sector investment in Philippines. It has accomplished this by
providing venture capital for productive private enterprises in association
with local investors and management, by encouraging the development
of local capital markets, and by stimulating the flow of private capital.
IFC has supplemented, rather than replaced, private capital in
Philippines. It has played an important catalytic role in mobilizing
additional project funding from other investors and lenders, either in the
form of co financing or through loan syndications, the underwriting of
debt and equity securities issues, and guarantees. In addition to project
finance and resource mobilization, IFC has offered a full array of
advisory services and technical assistance to Philippines in such areas
as capital market development, corporate restructuring, risk
management, and project preparation and evaluation, and has also
advised Philippines government on creating an environment that
encourages the growth of private enterprise and foreign investment.

26. THANK
YOU