The Asian Development Bank (ADB) has firmed up its commitment to provide $1.16 billion in financial assistance to the Philippines this year.
In a press conference yesterday, officials of the Philippine government and the ADB signed a memorandum of understanding for a Country Programming Mission (CPM) that would pave the way for the implementation of the 2000 lending program and discussion of a three-year forward program for the period 2001-2003.
The MOU was signed by Socio-Economic Planning secretary Felipe Medalla, National Economic and Development Authority (NEDA) deputy director Ruperto Alonzo, ADB program director Geert van der Linden and ADB senior economist and mission leader for the CPM Shiladitya Chatterjee.
The main areas of emphasis for the loan program are: poverty reduction, human development environment, private sector participation and governance and anti-corruption.
The ADB loan will consist of $710 million in project loans and $450 million in the form of co-financing.
The $710-million loan will cover at least seven projects in agriculture, energy, social infrastructure, and finance and industry sectors. Specifically, it will consist of Grain Sector Development Program ($175 million); Transmission Interconnection and Reinforcement Loan ($100 million); Pasig River Environmental and Rehabilitation ($175 million); Technical Educational and Skills Development ($45 million); Infrastructure for Rural Productivity Enhancement Sector ($70 million); Non-bank Financial Intermediation ($100 million); and Mindanao Basic Urban Services Sector ($45 million).
Chatterjee said the projects under the $450-million ADB co-financing component have already been identified. But the list of projects has yet to be released.
ADB has also allocated about $1 billion for the total loan pipeline for 2001-2003 involving 17 projects. About 50 percent of the loan pipeline is targeted to be augmented through co-financing.
Projects lined up for the three-year forward program include: Rural Electrification Project, SME Export Development, Education Sector Development Program, Development of Poor Manila Urban Services for the Poor, and among others.
This assistance program, according to Chatterjee, was based on government's Medium-Term Philippine Development Plan 1999-2004 and ADB's country operational strategy.
Chatterjee said the annual lending levels were determined by the country's absorptive capacity indicated by past disbursement levels averaging about 4300 million annually.
Van der Linden said the CMP is consistent with the government's poverty reduction program wherein nine of the 17 projects in the three-year forward program will directly target poor beneficiaries while the remaining eight will also indirectly benefit the poor.
Medalla, however, expressed concern that the success of the ADB loan programs depends on the timely adoption of key reforms such as the Revised Securities Act, Omnibus Power Sector reform Bill and National Food Authority Restructuring.
According to Medalla, some of the ADB loans have considered these key reforms as conditions before releases are to be made.