ADB notes improvement in loan portfolio of RP

The Philippines has improved on its loan facilitation from the Asian Development Bank (ADB) in the past three years, a senior ADB official said.

The ADB recently conducted after a two-day review of its loan program with the Department of Finance (DOF), the Department of Budget and Management (DBM) and the National Economic and Development Authority (NEDA).

The Philippines has 35 active loans with the ADB dating back several years.

The loan disbursement ratio last year for instance was recorded at 33 percent,the second highest since 1997. In the previous years, the disbursement ratio sunk to as low as eight percent.

Last year, the ADB also noted several successful completions of some sector reform programs, enabling the release of program loan tranches, two of which were released last December. These are for the Pasig River Environmental Management and Rehabilitation Sector Development Program ($60 million) and the Metro Manila Air Quality Improvement Sector Development Program ($100 million).

"The review confirms a positive trend of further improvements in the Philippines’ portfolio performance in terms of the reduction of undisbursed loan balances on which the Philippine government pays commitment fees, the increase in the rate of loan disbursement, and the reduction in the number of projects identified as being at risk of not meeting their development objectives or being implemented effectively," said Thomas Crouch, ADB country director for the Philippines.

He further pointed out that the government representatives promised to ensure a more proactive project monitoring mechanism for timely implementation of corrective action plans and to remedy major impediments in project implementation.

The Philippines is ADB’s fifth largest borrower, accounting for eight percent of cumulative lending.

However, the Manila based multi-lateral agency has cancelled 22 program and project loans last year. From 51 projects worth $1.8 billion at the start of the 2003, it has been trimmed down to 31 as of end-December.

By June, five more loan packages will reportedly be cancelled worth almost $50 million due to further delays in the projects’ implementation.