ADB signs trade finance deal with 5 local banks

Local traders may now obtain financing for exports and imports after five local banks signed up for the Asian Development Bank's (ADB) $1-billion regional trade finance facility. The banks that signed the deal on Tuesday under the ADB’s Trade Finance Facilitation Program (TFFP) were Allied Banking Corp., Development Bank of the Philippines, Metropolitan Bank and Trust Co., Philippine National Bank and Rizal Commercial Banking Corp. In a statement, the ADB noted that companies in developing countries have struggled to obtain the trade finance they need to export their goods or to import critical components for products they make or services they provide. "What little trade finance is provided by developing country banks is often channeled to larger companies, with smaller firms missing out," it pointed out. Philip Erquiaga, director-general of the ADB’s Private Sector Operations Department, noted that in the Philippines, small and medium firms employ about three-quarters of those who work in the manufacturing sector. "If those firms can access more trade finance, they will be able to expand and employ more workers. That would boost personal incomes and help to reduce the country’s poverty levels," he pointed out. The $1-billion program provides loans and guarantees through international banks and the ADB’s developing member-country banks to support trade transactions in developing nations. Last year, about half of the program portfolio supported international trade conducted by small and medium enterprises. Aside from providing financing, the program links banks and companies in developing economies with their counterparts in other developing and developed economies. This, the ADB said, builds relationships and spurs job-creating business opportunities and knowledge sharing that will help banks and their clients in the longer term. "In today’s world, it’s critical that companies and banks reach beyond their borders. Such regional and global integration and cooperation helps economies and the people within them to reach their full potential," said Neeraj Jain, ADB’s country director for the Philippines. — Norman P. Aquino, GMANews.TV