Plantersbank, IFC to complete P3-B SPV

MANILA, Philippines - The Planters Development Bank and the International Finance Corp. (IFC) are nearing completion of a special purpose vehicle (SPV) with a distressed asset portfolio of P3 billion, a top IFC official said.

IFC representative to Manila Jesse Ang said the SPV forms part of their initiatives in helping push for reforms in the country’s financial sector.

“SPV with Plantersbank is ongoing. Hopefully, (we) get it done soon,” he said.

Ang said the creation of the SPV would still have to pass through a number of processes.

“There are a number of processes we have to go through, legal documentation, not just internal processes,” he said.

Last July, IFC and Plantersbank announced plans to set up a $71-million SPV.

The SPV acquired Plantersbank’s non-performing loans (NPLs) and real and other properties acquired (ROPAs).

The IFC official said they are also awaiting the approval of the Bangko Sentral ng Pilipinas (BSP).

But he said the IFC board had already given its go-signal to proceed with the process.

He said after they have secured an approval from the regulators, they would finalize the price for the assets.

“Last thing (would be) the price,” he added.

IFC, the private sector investment arm of the World Bank, said the SPV project would allow Plantersbank to jack up its lending activities by transferring its bad assets to another entity.

Specifically, the $71-million SPV project is part of IFC’s Debt and Asset Recovery Program (DARP), which is a crisis response initiative addressing distressed assets, roll over risk and restructuring.

“DARP’s strategy is to revitalize financial systems through investments in distressed assets and servicing companies/platforms,” IFC earlier said.

IFC has about P1 billion in equity, loans and grants in Plantersbank. Planters bank is owned by the family of Amb. Jesus Tambunting.

In 2005, the thrift bank formed an SPV to manage its bad assets worth P2 billion. It is still being serviced while it is forming a new SPV with the IFC.