ADB hikes lending to Philippines

MANILA, Philippines — The Asian Development Bank has committed to increase its lending to the Philippines to $7.4 billion from 2019 to 2021 or about $2.5 billion annually in an effort to support the Duterte administration is massive infrastructure program, the chief of the ADB said yesterday.

ADB President Takehiko Nakao said the agency is pushing to double the amount of loans it will extend to the Philippines in the next three years to roughly $2.5 billion a year from the annual average of $1.3 billion from 2011 to 2017.

“We are now thinking of increasing once again our loan to the Philippines, doubling from $1.3 billion (from 2011 to 2017) to $2.5 billion in the coming years. So from 2019 to 2021, we will have $2.5 billion in loans committed every years,” Nakao said in a speech during the ceremonial exchange of documents on two loans at the Department of Finance (DOF) yesterday.

According to Nakao, ADB raised its lending assistance to the Philippines to support the major infrastructure projects under the administration’s Build Build Build program.

He said one of the areas in which ADB could provide its assistance is the preparation of the projects to ensure that the Philippine government would only implement projects that have positive impact.

In line with this, the ADB is considering next year the additional financing for the Infrastructure Preparation and Innovation Facility. An initial amount of $100 million was already committed for the loan facility in 2017.

“The infrastructure investment will increase dramatically to 7.4 percent (of gross domestic product) by 2022. What is important is to find the good projects, so we are providing loans to prepare those projects well,” the ADB chief said.

The DOF and the ADB yesterday exchanged loan documents on the Expanding Private Participation in Infrastructure Program Subprogram 2 (EPPIP-2) and the Inclusive Finance Development Program (IFDP-1). Both programs have approved loans of $300 million each.

EPPIP-2 aims to help fund the government’s external financing requirements and build on the accomplishments in tapping private sector expertise and financing for the Build Build Build program via Public-Private Partnerships (PPPs).

Meanwhile, the IFDP-1 aims to continue developing a resilient and inclusive financial sector in the Philippines by expanding financial services to small businesses, farmers, workers, women and other vulnerable sectors.

“Attaining financial inclusion and modernizing our infrastructure backbone are two main tasks the Duterte administration seeks to accomplish over the next four years. These two loan packages fall squarely into the national priorities we have identified. They will surely help us in achieving rapid, investments-led economic expansion,” Finance Secretary Carlos Dominguez said.