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Banks open to financing mining projects |
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MANILA, Philippines -- The local banking and finance sectors expressed willingness to finance mining projects in the country at a two-day forum that started yesterday hosted by the Chamber of Mines of the Philippines together with the Philippine Stock Exchange, Inc. and the Financial Executives Institute of the Philippines (FINEX).
Various speakers from the private sector discussed ways to bridge the knowledge gap between the mining companies and the financial sector in order to address the issue of financing for mining projects in the country.
"There seems to be a gap between the mining industry and the banking, financial sector so forums such as these are helpful so that we in the banking world would understand the details of the mining industry because we would like to help you," said Filomeno Yaptinchay, vice president of Standard Chartered Bank.
Although Yaptinchay said that there were various opportunities in various stages of mining, i.e., exploration, extraction, production stages, he emphasized the importance of a mining company’s track record.
"Track records are important because for us, that's where we can see the sustainability. If a mining company for instance has closed down mines, stopped exploration abruptly, or reopens a closed production, that kind of information or track record is vital for us," Yaptinchay said during the forum.
Banco de Oro (BDO) president Eduardo Francisco also agreed in behalf of local banks, that they are willing to re-learn and understand the mining sector so they could provide their services.
In an interview with INQUIRER.net, Francisco said, "I think it's a good time to re-enter in the mining industry because they are rich commodities that have been untapped and we -- and I'm speaking in behalf of local banks here -- have not been active key players in the local mining industry."
While the recession is gravely felt in the West and some parts of Europe, Francisco said that the crisis has little to no effect in the Philippine economy.
"Credit is tighter in the US, but for us we’re still showing a positive sign. Banks are still stable, there's still a lot of liquidity so it’s still flexible so why not? We want to support this industry," Francisco said.
The private sector is so willing that Francisco said the "size of investment is not an issue."
"We have BAP, BSP, Allied Bank, all these banks who lend out millions to different companies and sectors they are familiar with. So once we familiarize ourselves with the industry, once proposals and documents are set, it's a go. You know, banks just want loans to be repaid." Francisco said.
During his speech, Francisco enumerated ways in which mining industries at an operating level or project development stage can seek for loans or investment.
Francisco enumerated key points for possible re-entry of bank assistance to the industry. “Earlier stage financing is for equity and venture capitalists. Banks can also support earlier stage financing but with loans that are structured more as corporate credits," said Francisco.
Philippine Export Import Credit Agency, a government financial institution attached to the Department of Finance, also showed interest in funding mining ventures and projects.
"Mining is part of our priority sectors and based on our legal mandate, we can issue guarantee up to 15 times the subscribed capital stock, or up to P150 billion with single account limit of P10 billion," said Celso Gutierrez, senior vice president of PhilEXIM.
While there is obvious liquidity in the private sector, key bank officials urged heads of mining companies to start with their proposals. "The sooner we start, the better," Francisco said.
Ported from INQUIRER.net
By Erika Tapalla
02/27/2009 |
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