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IFC Helps Philippine Banks Unload Bad Debts to Regain Capital for Lending and Creating Jobs


In Manila, the Philippines:
Art Cariaga
Phone: +63 2465-2705
E-mail:
acariaga@ifc.org


Manila, the Philippines, November 24, 2014—IFC, a member of the World Bank Group, has approved a loan of up to 1.79 billion Philippine pesos ($39.7 million) to ACP Investments One Inc., a special purpose vehicle, to acquire nonperforming assets from Philippine banks and other financial institutions. The financing will enable banks to free up capital and increase their lending to businesses that will create more jobs.
 
The seven-year senior loan is part of IFC’s Debt and Asset Recovery Program, which helps financial institutions in various countries off-load nonperforming assets so that they can extend more credit to enterprises, especially in rural sectors where access to finance is limited.

“IFC’s involvement in this initiative will create a healthier marketplace as its loan will help financial institutions off-load their nonperforming assets, strengthen their balance sheet, free up resources for more lending, and encourage other investors to re-enter this market,” said Benjamin C. Sevilla, President of ACP Investments One Inc., which is owned by Altus Capital Corp. “This effort will build the capacity of local asset managers by bringing in global best practices in asset resolution.”

Established in Manila in 2005, Altus Capital Corp. has expertise in establishing and managing portfolios of nonperforming loans and distressed real-estate assets. It is the manager for the 9-billion-peso distressed-asset portfolios acquired from RCBC and Plantersbank through special purpose vehicles that IFC helped finance in 2013.

“IFC’s Debt and Asset Recovery Program has allowed banks to off-load up to $21.5 billion in nonperforming loans and helped 4.9 million families and small enterprises normalize their financial obligations,” said IFC Resident Representative Jesse Ang. “People were able to save their homes and other assets, while the enterprises’ renewed access to formal credit kept their businesses going and preserved existing jobs or created new ones.”

Philippine banks, particularly the large universal and commercial banks, held some 140 billion pesos ($3.1 billion) worth of nonperforming loans and 135 billion pesos ($3.06 billion) in distressed real and other properties as of September 2014.

About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit www.ifc.org.

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