PRIVATE ENT CREDIT

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The Private Enterprise Credit Support Project seeks to augment long-term resources of Development Bank of the Philippines (DBP) and, in turn, of a number of banks with the main objective of assisting private sector enterprises, particularly small- and medium-sized enterprises, affected by the credit crunch and currency crisis. The project consists of two components. The first component, line of credit for equipment and permanent working capital, will finance principally plant and equipment to be purchased by private sector corporate borrowers. Permanent working capital financing will be eligible. Moreover, expenditure incurred by the borrowers in preparing plans for their corporate restructuring and for export market exploration and development will be eligible. While DBP is the borrower, the credit will be made available to the ultimate users of the loan proceeds through a number of participating financial institutions. The second component, technical assistance for DBP's institutional development, will help promote DBP's financial credibility in the financial markets so that it may raise long term funds on its own without government guarantee. It will also strengthen DBP's treasury functions and optimizes the management of its financial resources through procurement and installation of necessary computer software and hardware.