International Finance Corporation
A. Background
1. As the private sector arm of the World Bank Group, the International Finance Corporation (IFC), takes a leadership role in areas such as capital markets development, new models of public-private partnership for infrastructure, environmental and social sustainability, corporate governance, environmental finance, and investment climate research.
2. So far, it is the largest multilateral source of loan and equity financing for private sector projects in the developing world. It invests in for-profit ventures and charges market rates for its products and services, which are the following:
(a) Equity and Quasi-Equity: IFC buys shares in project companies, other project entities, financial institutions, and portfolio or private equity funds. They generally subscribe to between 5 and 20 percent of a company’s equity. They do not normally hold more than a 35 percent stake or be the largest stakeholder in a project. With quasi-equity instruments, they invest through products that have both debt and equity characteristics.
(b) Loans and Intermediary Services: IFC finance projects and companies through their A-loans, which maturities generally range between 7 and 12 years at origination, but some loans have been extended to as long as 20 years. IFC’s loans are provided in major currencies and in an increasing number of emerging market currencies. They also make loans to intermediary banks, leasing companies, and other financial institutions through credit lines that result in further on-lending. These credit lines are often targeted to smaller businesses.
(c) Syndicated Loans: Through syndicated loans, or B-loans, financial institutions share fully in the commercial credit risk of projects, while IFC remains the lender of record. Participants in IFC’s loans benefit from the status of IFC as a multilateral development institution, including their de facto preferred access to foreign exchange.
(d) Structured Finance: IFC also offers structured finance solutions to clients, enabling them to raise a significantly larger amount of capital than that represented by IFC’s own exposure. Through partial credit guarantees of debt instruments, the triple-A rating of IFC help clients diversify their funding sources, extend maturities, and obtain financing in their currency of choice. IFC also helps clients structure securitizations and risk-sharing facilities, transactions that allow a client to sell off part of the risk associated with a pool of assets.
(e) Risk Management: IFC’s risk management products provide clients with access to long-term derivatives markets. Currency hedging instruments allow clients to hedge foreign exchange exposures typically related to foreign currency borrowings.
(f) Technical Assistance and Advisory Services: Technical assistance complements IFC’s investment activities by offering advisory and training services to governments and private companies in developing countries. They deliver many of these services through donor-supported technical assistance facilities that focus on either a region or a strategic aspect of development. They also manage trust funds supported by donor governments and have established a funding mechanism that sets aside a portion of the Corporation’s net income as a contribution to donor-funded operations.
3. IFC and the World Bank work together to survey and assess the investment climate of developing countries. An online database makes data from 30,000 firms accessible to governments considering reforms. IFC and the Bank also publish the annual Doing Business report, which provides objective, quantifiable indicators of business regulations in 150 countries. Reform efforts in many countries have been spurred by the data and recommendations.
B. Transactions with IFC
1. Financial Restructuring of Mariwasa Manufacturing Inc. (MMI)/Mariwasa Siam Ceramics Inc.(MSCI): MMI and MSCI had to restructure all its outstanding loans due to financial problems contributed by increased production cost, dampening of domestic demand and depreciation of the peso since the Asian financial crisis.
BSP-Monetary Stability Sector approved the restructuring of the JPY1,257.96 Million (about US$10.37 Million) and US$3 million loans from IFC, which refinanced outstanding FCDU Loans, on 05 March 2007. At the same time, BSP also approved the redenomination to Japanese Yen of the remaining balance of the US$3.0 million IFC loan after restructuring (approximately US$706,161.40 including capitalized interest) to consolidate the IFC loans into one account.
2. IFC Peso Loans Funded by PhP/USD Cross Currency Swaps (CCS
[1]). In August 2003, the Monetary Board (MB) approved in principle the proposal of IFC to extend Peso loans to Philippine clients funded by the CCS. The following loans have been approved by MB under the said lending program:
(a) South Luzon Expressway Project Phase 1: US$50 Million 9-year loan to South Luzon Tollway Corporation (SLTC) approved on 16 November 2006.
(b) Financing for the purchase of contracts to sell receivables from real estate developers covering housing mortgages of low and middle income households: PhP1.06 billion (approximately US$20 million) loan to Planters Development Bank (PDB) approved on 22 June 2006
(c) Financing for the purchase of housing mortgages: PhP2.25 billion loan to Filinvest Land Inc. approved on 16 June 2006
(d) Capital investment program: PhP equivalent of the US$15 million loan to Cagayan Electric Power and Light Co.,Inc. (CEPALCO) approved on 05 May 2005
(e) Financing for the purchase of National Home Mortgage Finance Corporation’s non-performing loans: PhP1.65 billion loan to Balikatan Housing Inc. approved on 14 April 2005.
3. Private Enterprise Partnership for the Philippines (PEP-Philippines) : The PEP-Philippines was launched in 2006 and is designed to support the development of small and medium enterprises through the provision of investment and technical expertise to implement projects that would ease small and medium enterprises’ access to finance, strengthen linkages between large and small market players and help improve the overall business environment. This is managed by IFC and co-financed by the Governments of Australia and Canada.
4. Projects provided with Technical Assistance Advisory Services (TAAS) by IFC:
(a) North Luzon expressway on private transport work.
(b) Manila Water Corp. and the Metro Cebu Water District on water and sanitation work.
(c) Light Rail Transit Authority (LRTA) on the extension of the LRT-1 rail line from southern Metro Manila into Cavite province.
(d) Cagayan Electric Power and Light Company (CEPALCO) on private electricity distribution, which is now running on solar-powered photovoltaic cells under the IFC's Global Environment Facility (GEF) in partnership with the international Sustainable Energy and Economy Network.
C. Potential Collaborations
1. IFC may want to consider providing loans with improved terms and conditions for transportation, irrigation, energy and other infrastructure projects to comply with BSP’s external debt management framework that aims to obtain loans at favorable terms and conditions and to channel priority projects and activities. In particular, IFC is encouraged to explore the possibility of waiving some fees to make their proposals at par with those offered by World Bank and Asian Development Bank
2. BSP may also need the support of IFC in the development of a centralized credit information bureau to improve the quality of financial information to investors, expand private sector access to credit and minimize exposure to risks of financial intermediaries.
3. IFC can also be tapped to play an instrumental role in the advocacy program of BSP on microfinance, particularly in promoting the development of sound and sustainable microfinance operations.
[1] IFC swaps its own hard currency financing for local currency at the time of disbursement
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1. Read on IFC - two hours
9:45 - 11:45
2. Read on BSP - two hours
11:50 - 12:00
12:05 - 12:20
13:30 -15:05
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Note for me:
1. It would help if you also let the staff know what you are up to. In that way, the staff won't feel that you are just passing the job to him/her.
Asian Bond Fund
Asian Bond Funds (ABF) were initiated to promote greater regional financial integration particularly in the bond market and to eventually help financing private sector investment in Asia. The initial step involved pooling US$ 1 billion of their foreign reserves to form the ABF1 to purchase a basket of U.S. dollar-dominated bonds issued by eight EMEAP economies (China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore, and Thailand).
Since inception in July 2003, the BISIP Series ABF1 has registered a total return of 14.39% versus 13.77% for the JACI sovereign and quasi-sovereign index. The performance of a comparable constant duration US treasury benchmark was 8.93%. Net of fees the ABF1 returned 13.71%. The total size of the ABF1 as of 31 January 2007 was USD 1,165,494,157.
In December 2004, the ABF2 was launched comprising a Pan-Asian Bond Index Fund (which is now named as ABF Pan-Asian Bond Index Fund/ PAIF) and eight Single-market Funds. The PAIF is a single bond fund investing in sovereign and quasi-sovereign local currency-denominated bonds issued in the eight EMEAP markets. The eight Single-market Funds will each invest in sovereign and quasi-sovereign local currency-denominated bonds issued in the respective EMEAP markets.
Taiwan
Interesting.
How would you call Taiwan if one of the delegates is China?
Still waiting for the answer.
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Carry trade - investors borrow in low interest rate currency to invest in high yielding currencies, taking on, currency risk in the process
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Japan Philippine Economic Partnership Agreement
Also known as JPEPA
A reminder that that I put together notes for the Japanese Legislative Agenda and JBIC yesterday (22 May 2007) as part of the brief of the BSP Governor.
- They'll sign a side agreement, to be signed by the two countries’ foreign ministers, will have Japan promising not to export materials considered illegal in the Philippines
- A recent report from the Japan Center for Economic Research showing how the ASEAN plus 3 (Japan, Korea and China) grouping would directly benefit the Philippines.
- By 2020 the Philippines was projected to grow by 3.3 percent more, which, added to the current projected 6 percent, would mean a growth of 9.85 percent.
- With ASEAN plus 6 (Northeast Asia, India, Australia and New Zealand), the country would grow by an additional 4.10 percent, which would mean 10.20 percent.
- Philippines is now back on the radar of European and US investors, with the stock market at an all-time high, more foreign outsourcing and IT businesses locating in the country, and higher average growth in the past six years.
- With Japan back on track after a decade of economic slump and looking to its neighbors as the key to future growth in the face of its ageing population, we have to develop relationship with them.
- If anything, officials are worrying that investments might be coming in too fast and the peso would rise to P45:$1, which would worry exporters.
- Siazon pointed out that the Philippines grew 4.3 percent on the average during the past six years.
- The President said government activities yielded big economic rewards, including the $1-billion expansion of the US-based Texas Instruments. Tokyo Electric Power Co. and Marubeni Corp. were also making a $4-billion investment -- the largest Japanese investment in Philippine history.
- The two areas which the Philippines would like Japan to invest in are power and information technology.
- Japan is the Philippines’ second largest trading partner. In 2006, the total volume of trade was $14.7 billion, with the Philippines enjoying a surplus of P700 million.It is also the largest source of tourists, with more than 400,000 Japanese visiting the Philippines every year.
- Japan is also the biggest provider of official development assistance to the Philippines, accounting for two-thirds of all ODA annually and there are 200,000 Filipinos working in Japan.
- If the JPEPA is ratified, the Philippines can soon start sending trainees as nurses and caregivers to Japan, said Siazon.
- Japan and the Philippines share a Mutual Defense Treaty with the United States -- a relationship that the Philippines considers important in stabilizing the region.
- The President will meet with Prime Minister Shinzo Abe, who is expected to brief her on the process of amending the Japanese Constitution -- an issue now being hotly debated.
Japan’s pacifist Constitution is seen to hamper its ability to take on a leadership role in the world commensurate with its status as second largest economy.
Financial Market
Market for the exchange of capital and credit in the economy. Money markets concentrate on short-term debt instruments; capital markets trade in long-term debt and equity instruments. Examples of financial markets: stock market, bond market, commodities market, and foreign exchange market.
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Types of financial markets
The financial markets can be divided into different subtypes:
The capital markets consist of primary markets and secondary markets. Newly formed (issued) securities are bought or sold in primary markets. Secondary markets allow investors to sell securities that they hold or buy existing securities.
Moving Up the Ladder
I keep the newspaper clipping on this. Before I lose it, I'm going to post it here.
10 Strategies for Getting Yourself PromotedSome career experts say that the day you start a new job you should begin planning for your next job. And you know what? You should! Just make sure that you stay focused enough on the you were hired for that you succeed and excel in the position before looking for the next one.
Promotions are not a given. It is used to be that workers progressed along specific career paths during their careers, but the impact of technology, globalization and flatter organizational structures has changed that paradigm. Today, employees have to create and manage their own career paths -- through one or multiple organizations. And remember that a promotion is not always an upward path. Sometimes - especially in today's business environment -- you may need to make a lateral move to position yourself for a later upward move.
How do you develop your promotion plan? Incorporate these 10 strategies into your plan.
Surefire Ways Not to Get Promoted
1. Don't plan your day. Go to work each day without a plan in mind.
2. Do the minimum. Have the attitude of "they don't pay me that"
3. Rely on your current base of knowledge. No need to learn new skills.
4. Voice your complaints. Be vocal about what you don't like at work.
5. Don't share the credit. Put your name alone at the top of successful projects.
From Dr. Donald E. Wetmore's The Productivity Institute1. Develop Mentoring RelationshipsOne recent study found that in four out of five promotions, those promoted had a mentoring relationship with someone higher in the company who helped spread the good word about them. Some companies have formal mentoring programs, but even if your company does not, there are still ways you can build relationships with people in higher positions in the company. Mentors can also be great sources for information and career guidance.
2. Quantify Results While promotions are not necessarily based on your past performance, you can certainly make a better case for promotion by showing detailed information about your past successes. Those who get reseults, get ahead.
Keep a record of everything you do that enhances the company's bottom line, that puts the company or your department in a good light, that is creative and innovative, and that shows your loyalty and commitment to the organization.
3. Practice Self- PromotionWe're taught by our families that modesty is a virtue, but as with job-hunting, if no one knows how great you are, you simply won't go ahead. Be a known quantity. If you have had a major accomplishment or created new or award-winning programs, make sure people know about them -- especially doing the promoting.
Sell yourself -- and let it be known that you are seeking a promotion. One professional we know sends out a monthly e-mail to his boss and his boss' boss to keep them updated on his progress on various projects -- and to share any accomplishments and accolades that occured in the previous month.
4. Establish a Bond with Your BossIt might help to think of your boss as one of those border guards between countries. S/he can either be raising the gate and waving you onward and upward to your next position within the company, or s/he can be keeping the gate down and blocking you from any movement within the company. Use all opportunities to make your boss a key supporter of your promotion.
Use professional settings to seek counsel and stress your interest in staying with the company. Use performance appraisals not just to go over your accomplishments, but to talk to your boss about potential roadblocks to a promotion -- and how to overcome those roadblocks.
Some experts also suggest building rapport with your boss by learning more about his/her outside interests and hobbies -- and then chatting about them during conferences, parties or other informal activities.
5. Acquire New Knowledge and SkillsIt goes without saying that one of the best ways to succeed in getting a promotion is to expand your knowledge and skills sets in areas that are critical to the organization. As technology and other environmental forces change rapidly, you need an ever-increasing skill set not only to perform your job but to stay marketable.
Experts also suggest that employees who want to get ahead should not only keep current with industry news and event, but also pay attention to trends and events outside their specialty.
6. Build Your NetworkThe more people who know you, know your strenghts and abilities, know your value to the organization, and know (at least some of) your ambitions, the more likely your name will be discussed when opportunities arise.
An added benefit of networking is that you will learn much more about the company if you network with people in other areas of the organization. Learn more about networking here.
7. Ask for More ResponsibilitiesVolunteering to help out other departments or teams -- or simply asking for more responsibilities -- increases your value within the organization. Asking for more work shows your interest and desire to help your department and company to succeed -- as well as putting a spotlight on your value to the organization
8. Act Professionally at All TimesEarn a reputation for being dependable, professional and cooperative. Act and look the part.
- Dress professionally and neatly -- even on business and casual days
- Ask questions when you aren't sure how to do something
- Dare to be different -- make yourself stand out from the pack
- Keep a postive outlook on things, even when in tough situations
- Don't whine or complain -- or blame others -- when things don't go your way
- Make a name for yourself in your industry through conferences, articles, speeches
- Don't be a clock watcher
Finally, be a problem-solver. Don't go to your boss with your problems. If a difficult situation arises, be sure to come up with at least one solution before seeking your boss' blessing for dealing with the situation. Problem-solvers get promoted. Complainers who expect the boss to solve all their problems don't.
9. Be a Team Player Because so much work is now accomplished through teams -- departmental or cross-functional -- it becomes even more important to share successes with your team and to avoid pointing your finger when there are failures.
And by being a team player, you only build your reputation and increase your value to the organization.
10. Create Your Own OpportunitiesAfter studying the needs and challenges of the organizations, if you see an area that has been neglected -- and you have key skills in that area -- write a proposal for a new position.
And even if the company does not go for the new position, you have again shown your initiative, creativity and value to the firm -- and these things can only help you the next time you request a promotion.
Executives' Meeting of East-Asia Central Banks So here's what to know when I get on board.
A. Note in advance external and internal requirements
A.1 External
A.1.1 Logistics: Accommodations, Flights, Activities, Preferences
A.1.2 Programs
A.1.3 Papers: Those to be delivered by Speakers
A.2 Internal
A.2.1 Aide Memoire for the Governor and the like
A.2.2. Information Support from Other BSP Groups (Due Diligence)
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I am not a fan of short notices. I've been working for the government for the past 8 years and I learned that "working under pressure" is due to holders of managerial position who doesn't know how to manage. Before anything else, the appointed lead should know the big picture. It's similar to knowing the most probable ending of a movie. The financing transactions we had in 2006 were executed smoothly in the span of two weeks because all of us were aware of the big picture. So far, the most difficult was the Offering Circular -- the hundred plus plus investor handbook on everything about NPC/PSALM and ROP. Here are the things I learned with due diligence for the Offering Circular while I was in PSALM:
1. Familiarize self on the topics - Give it a day.
2. Introduction is on the recent activities of the economies.
3. Someone should really lead and impose deadlines.
4. Map and get commitments.
Transfers within the Government
I am more prepared now compared to my tranfer from DBM to PSALM. Here are some tips:
1. Inform immediate supervisors way ahead prior to actual transfer/resignation.
2. Two weeks' notice is enough. Get salary first before leaving.
3. Make sure you have enough funds to cover periods without salary.
4. Get all your stuff on a weekend.
5. Set up Out of the Office Assistant of your mail.
6. Make notes on computer configurations.
7. Bring CD to transfer files.
I'll miss the fast internet connection in the office. With the 2 Fino Leather Bag on my mind and the Philip Stein Watch, how could I ever get a Globe Visibility? Hay, why am I buying these things with only PhP50,000 in my pocket. Moreover, I still have that Shang-ri La Mactan Conference that I need to attend to. Anyways, tapusin ko na nga yung financial projections para di ko masyadong iniisip ito.
First Writing Racket: Lessons Learned
1. Get the Big Picture.I took this stint to know how it works so that next time, I can systematize and manage it well. The stint initially involved financial projections for a start-up mining company. Eventually, client asked to provide figures for the financial part of the feasibility study. The dangerous part of it is we left Bob do the coordination part because he was the one who has connections to the client. Bob, however, is too busy to even study the requirements of the projections. Information are usually incomplete and I ended up preparing something that wasn't really needed because Bob failed to capture the big picture. When I was reading the materials for the stint, it dawned on me that our services were sought for the feasibility study. If I knew then that we were supposed to work on it, I should have not gone through great lengths to work on this.
2. Know the industry before opening up to commitment. Ask client to give you 24 hours to think about the service being sought. Since I was assigned to financial projections, I didn't find time to familiarize myself on nickel content. The first thing I did was to check Bloomberg. which showed prices for precious metals and base metals but none of it on nickel with different grades.
3. Sign an Agreement. Prior to making a commitment, spend one hour familiarzing self with the industry. To avoid multiple revisions, sign an agreement with a clear description of what the client needs. Put some allowance for revisions, say the client can ask revisions thrice and every revision thereafter is charged with an additional 5%.
4. Ask for a timeline. Agree on reasonable deadlines. I realized that the stint was stressing me because it was taking so much of my time with Bob asking for outputs to be delivered immediately or on the same day. Initial output to be provided within 5 business days while revisions may need a maximum of 3 business days. Next time, I should be strict to myself. I shouldn't spend the entire day figuring things out. I should take time.
Research (3 hours).
Readings (5 hours).
Research (3 hours).
Action (important things first: 3 hours)
4. Don't commit unless client knows exactly what she/he is looking for. Related to getting the big picture. Awhile ago, when we were having a meeting. Bob was saying that price would depend on importation cost. Eventually, when Eileen arrived with data from, he said the LME would provide prices for nickel with 1.05 something. So, Bob confused me a lot. I realized that with him at the helm, I just have to note everything that he is saying then focus on what matters. Some 90% of the things said doesn't contribute to anything related to the stint.
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Summary: Arm self with an agreement.
