ADB extends $680-million loan to Philippines

MANILA, Philippines — The Asian Development Bank (ADB) is extending a $680-million loan to the Philippines for the improvement of Mindanao's road network and the enhancement of the country's capital market.

The government, led by Finance Secretary Carlos Dominguez, and the ADB, led by its president Takehiko Nakao, signed the $380 million loan agreement for the Improving Growth Corridors in Mindanao Road Sector Project (IGCMRSP).

Both parties also conducted the official exchange of documents for the $300 million Encouraging Investment Through Capital Market Reforms (EICMR) Program-Subprogram 2.

Dominguez, who also chairs the ADB Board of Governors, said the two aid packages are in line with the Duterte administration's inclusive growth agenda.

“Modernization of our capital markets and infrastructure backbone are the two main tasks the Duterte administration seeks to accomplish over the next five years. These two loan packages fall squarely into the national priorities we have identified,” Dominguez said.

According to the DOF, the first loan program involves the construction of 280 kilometers of national primary, secondary and tertiary roads and bridges in the Zamboanga Peninsula and Tawi-Tawi in Mindanao. It will require a government counterpart of $123 million.

Dominguez said the program would help in rapidly developing the southern Philippines and realize its growth potentials, which are key elements in achieving peace and prosperity for the region.

"The projects funded by this loan cohere with the comprehensive logistics improvement pursued under the Duterte administration. This is part of our Build Build Build program," he said.

Public Works Secretary Mark Villar expects to implement the project within the first quarter. The construction of the three bridges planned in Tawi-Tawi, meanwhile, will start by the third quarter.

"We are looking at substantial completion of the road network by this year. The bridges will take longer, within the next two years," he said.

The second aid package, meanwhile, would aid in the acceleration of investments in infrastructure through the establishment of a framework to diversify and broaden available funding sources, particularly private sector financing, the DOF said.

Dominguez said the project is "vital to encouraging investments in the economy and broadening public participation in the capital market.”

According to Dominguez, the signing of the two loans underscores the ADB's confidence in the administration's economic strategy.

“We look forward to more areas of cooperation in the coming days as the Philippines emerges to meet the challenges of development,” Dominguez said.