Memorandum of Conversation, by the Chief of the Division of Lend-Lease and Surplus War Property (Fetter)

Participants: General Roxas, President-Elect of the Philippines;
General Romulo, Rehabilitation Commission, Philippines;
Mr. Paul McNutt, High Commissioner to the Philippines;
Board of Directors and Staff Members of the Eximbank;
Mr. Fetter, State Department.

General Roxas raised the question of a $250 million reconstruction loan for the Philippines but stated later that he doubted whether more than $50 million could be spent effectively this year. He would like the loan to be made to the Government which would then lend it out to individual enterprises. He estimates that government revenues in the coming year will be 30–40 million pesos and that expenditures will be about 270 million pesos. He sees no source other than the Eximbank for the securing of reconstruction funds and he will seek authorization from the Philippine Congress on his return to the Philippines for such a loan.

He estimates that Philippine exports in 1946 will be about $15 million and imports about $150–$250 million.

War damage compensation will be about $400 million but that is only 40% of the pre-war value of the property and hence for reconstruction [Page 879] it will be necessary to get large additional sums. He would like a 35-year loan with no interest payments during the first five years and a low rate thereafter. He mentioned 2⅜%. He hoped that a loan could be obtained with no restrictions requiring that proceeds be spent in the United States. He suggested that a Bank representative come out to the Philippines to pass on individual projects but the bank directors indicated that if Bank approval was required they would prefer that it be done in Washington and not by a representative in the field.

The directors listened attentively but made no commitments to General Roxas other than to look into the matter further and see what would be possible within existing legislation and existing bank policies.30

  1. The Roxas–McNutt party left May 17 for Manila.