Manila, July 20, 2005
— The International Finance Corporation, the private sector arm of the World Bank Group, today launched IFC-Asenso, Assistance to Small and Medium Enterprises in the Philippines. The IFC-managed multidonor initiative aims to support the growth of small and medium enterprises in the Philippines, especially Mindanao. Her Excellency President Gloria Macapagal-Arroyo attended the event at Malacanang Palace.and witnessed the signing of the agreement establishing the new initiative
Small and medium enterprise development is a critical part of IFC's strategy in the Philippines, prompting this new initiative. "Combining IFC-Asenso's grant-funded technical assistance with IFC's investment capability gives us a powerful tool to support smaller companies,” said IFC country manager Vipul Bhagat. “These businesses create jobs and opportunities that are so important to poverty reduction."
The program has been welcomed by the Department of Trade and Industry in the Philippines, which signed the memorandum of understanding with IFC today establishing IFC-Asenso. It notes that the program supports objectives as stated in its 2004 SME Development Plan, which sets the agenda for public sector support for small and medium enterprises over the next six years.
“The overall objective of IFC-Asenso is to improve the business environment by increasing access to finance, promoting responsible business practices, and creating sector-specific opportunities for sustainable small and medium enterprise growth,” said Department of Trade and Industry Acting Secretary Peter Favila.
IFC-Asenso will draw heavily on other IFC’s regional resources supporting smaller businesses, especially IFC-PENSA, the Program for Eastern Indonesia SME Assistance. IFC-Asenso will place a heavy emphasis on supporting access to finance, improving the business-enabling environment, and facilitating links between smaller local companies and those with larger market reach in the agribusiness sector. “Strengthening the links in the supply chain between large companies and their local communities is fundamental to increasing business growth for small and medium enterprises and ensuring local economic participation,” said Chris Richards, general manager of IFC-Asenso and IFC-PENSA.
IFC-Asenso has a four-year mandate with an initial funding commitment of $5 million from IFC. Additional funding is being sought from other donor agencies that have interest in supporting the growth of small and medium enterprises in the Philippines. “The Australian government, through AusAID, and the Canadian government’s Canada International Development Agency are seriously considering funding IFC-Asenso,” said Bhagat.
"IFC has built significant experience in the field of small and medium enterprise development through its technical assistance work around the world," said Max Aitken, IFC’s Small and Medium Enterprise Department senior manager. “Our technical assistance support is based in countries and regions that have especially challenging environments for small businesses. IFC-Asenso will draw on global expertise while tailoring its program to meet the challenges that are unique to the Philippines."
IFC-Asenso services will be channeled toward local businesses with 10–300 employees. These companies typically have the agility to adjust to the volatile economic, political, and business climate of the Philippines, yet are not well served by existing markets and institutions. The program will not provide direct financing but rather will create carefully targeted technical assistance and capacity-building initiatives that draw on IFC links with the business community, the World Bank Group, donors, nongovernmental organizations, and other partners. IFC-Asenso will have offices in Manila and Davao, Mindanao.
IFC in the Philippines
IFC committed $102 million in the Philippines during the 2005 fiscal year in the housing finance, infrastructure and insurance sectors along with advisory mandates in the infrastructure sector. IFC has, for the first time, lent directly in pesos to local companies to mitigate their foreign exchange risks, and about 85 percent of this year’s program is local currency financing.
IFC-Managed Donor- Supported Technical Assistance
IFC and its donor partners fund technical assistance programs and facilities around the world, with combined annual budgets exceeding $50 million and more than 900 people on the ground. These facilities design and implement assistance programs that meet key needs of private sector development.
About IFC
The mission of IFC (
www.ifc.org
) 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
