ADB offers $3.68 B loans to Philippines

MANILA, Philippines — The Philippine government may be able to secure $3.68 billion in sovereign loans from the Asian Development Bank (ADB) in the next three years, the Department of Finance (DOF) said yesterday.

In a statement, the DOF said the ADB’s Sovereign Lending Program for the Philippines from 2018 to 2020 has a total amount of $3.68 billion, 40 percent of which will go to infrastructure-related projects.

Under the program, the DOF said $920 million will be earmarked for 2018, with an additional $400 million on standby. Another $1.4 billion will be allocated for 2019, while $1.36 billion is intended for 2020, with $600 million on standby.

The DOF said among the projects eligible for the ADB’s sovereign financing program include the $70-million Davao Public Transport Modernization Project, the $100-million Metro Manila Transport Project, $200-million Metro Manila Water Supply Project, $100-million Central Spine Connectivity Project Phase 1 and $160-million Mindanao River Basin Flood Control Project.

Other projects like the Expanding Private Sector Participation in Infrastructure Sub-Program 2 ($300 million), Inclusive Financial Sector Development Program ($300 million), Secondary Education Support Project ($300 million) and the Expanded Social Assistance Project ($300 million) are also eligible for possible loan financing from the multilateral agency.

Aside from sovereign loans, the DOF said the Philippines may also tap about $4 billion under the ADB’s Country Operations Business Plan for 2018 to 2020.

The DOF said $1.9 billion, or 48 percent of the total amount will be used for sustainable infrastructure and development. Another $1.2 billion will be earmarked for regional development and finance, and $900 million for human capital development.

The ADB, led by its president Takehiko Nakao, also informed Finance Secretary Carlos Dominguez III regarding the bank’s four new lending programs for the Philippines for 2018 amounting to $1.08 billion.

These include the $300-million Encouraging Investment through Capital Market Reforms Subprogram 2, $380-million Improving Growth Corridors in the Mindanao Road Sector, $300-million Facilitating Youth School-to-Work Transition and the $100-million Infrastructure Preparation and Innovation Facility.

The DOF said the IPIF, in particular, would include support for feasibility studies, detailed engineering design, preparation of bid documents, due diligence review and other activities related to preparation of infrastructure projects.

Dominguez, who currently chairs the ADB Board of Governors, said the facility would support initiatives of the Department of Transportation and Department of Public Works and Highways in conducting pre-investment activities for public infrastructure projects.

During their meeting with the DOF, ADB officials also assured the Philippine government of its support for the reconstruction efforts in Marawi City through its $225,000 technical assistance grant, with another $5 million from its Urban Resilience Fund.

The ADB also reaffirmed its support for the Philippines’ flagship infrastructure projects by co-financing with Japan the Malolos-Clark Railway and the North-South Commuter Rail line from Tutuban in Manila to Los Baños in Laguna.

It also supported the Duterte administration’s hybrid public-private partnership approach, in which the government finances the construction phase of the projects and bids out the operation and maintenance to the private sector.