MANILA, Philippines - The Philippines may be able to tap $3.8 billion in loans from the Asian Development Bank in the next three years to help fund the priority programs of the Duterte administration, the Department of Finance (DOF) said over the weekend.
According to a report by the DOF’s International Finance Group (IFG), the proposed lending program of the ADB to the Philippines under its Country Operations Business Plan (COBP) from 2018 to 2022, amounted to $3.8 billion which will cover three priority areas including infrastructure, social services and good governance.
Of the proposed amount, $1.8 billion may be used as loans to finance infrastructure development; $1.5 billion for education and skills development, access to finance, expanded social protection and employment opportunities for the youth; and $500 million for programs on good governance and finance.
“Program loans under the proposed lending pipeline make up 39 percent of the COBP, while project loans account for 61 percent,” the IFG said in its report to Finance Secretary Carlos Dominguez III.
The IFG said projects covered by the COBP for 2018 to 2020 include the Central Spine Roll-On/Roll-Off (RORO) Project and the Mindanao River Basin Flood Control Project, among others.
It also said the ADB has committed to design a $300 million package covering critical transportation infrastructure initiatives that can help ease traffic in Metro Manila. This initiative is being eyed for a co-financing arrangement with other multilateral institutions, such as the Asian Infrastructure Investment Bank and the Agence Francaise de Developpement, the IFG said.
Meanwhile, another $21.8 million in non-lending programs are also in the pipeline under the COBP, the IFG said. The programs include support for project preparations and capacity building of various government agencies.
According to the IFG, the ADB has also agreed to look into co-financing arrangements with the Japan International Cooperation Agency (JICA) for the Philippines’ flagship infrastructure projects, such as the proposed Philippine National Railways Malolos to Clark Railway and the PNR Commuter South Line project.
“On this aspect, the ADB agreed to help the Philippines beef up its capacity and readiness in handling and financing infrastructure projects, particularly on the construction of the country’s railways,” the IFG added.
The ADB has also agreed to hold quarterly meetings with Philippine officials to ensure that the bank’s country partnership strategy is aligned with the administration’s priorities, according to the IFG.
“The bank has also responded positively to our request to increase the Philippines’ lending envelope and provide more grants and technical assistance,” the IFG said.
Finance Secretary Dominguez had been appointed last May as chairman of the ADB Board of Governors.
Earlier, the bank committed its support for the Philippines’ infrastructure program.
ADB president Takehiko Nakao said improving the transportation infrastructure is one of the ADB’s priorities in the country. He said the lack of adequate infrastructure remains one of the more significant constraints to the Philippines’ growth prospects.