Gov't to earmark US$20B. In forex reserves to as low-interest loans to industries

Taipei, Dec. 22, 2003 (CENS)--To better use the huge foreign exchange (forex) reserves to revitalize domestic industries, the Executive Yuan (Cabinet) will convene a taskforce meeting on Friday to finalize the appropriation of forex reserves, at about US$20 billion for one year, as loans to qualified industries.

For such foreign currency-based loans offered by banks to domestic enterprises, the government intends to subsidize the banks with one-percentage-point interest payment. If taking the projected US$20 billion into calculation, the government's subsidies for such loans will amount to NT$6.8 billion (US$200 million at US$1 = NT$34) per year.

The industries that may be qualified for the loans include semiconductor, thin film transistor-liquid crystal display (TFT-LCD) products, information technology (IT) products, biotechnology, environmental protection, food, and machinery.

Relevant organizations under the Cabinet have mapped out needed loans for related industries. The National Science Council pointed out that procurements of machinery equipment and facilities by semiconductor and TFT-LCD firms operating in science industrial parks around the island are valued at around US$2 billion per year. The Ministry of Economic Affairs (MOEA) also said that the annual purchasing value for the IT industry outside the parks is around US$8 billion. As for other industries, electric machinery needs US$2.3 billion to buy equipment per year, consumer petrochemical US$2.67 billion, technical service US$162 million and environmental protection US$20 million.

In addition, the Ministry of Transportation & Communications (MOTC) said that Chunghwa Telecom Co. needs US$500 million to install the third-generation telecom equipment, and the Council of Agriculture noted that the food industry has to spend about US$5 billion to streamline facilities and purchase raw materials next year.