US grants $213-M aid to Philippines economy amid pandemic

MANILA, Philippines — The US is extending $213-million in aid to the Philippines’ “economic development and growth” amid the pandemic.

In a statement on Monday, the US Embassy announced that Manila and Washington, through the United States Agency for International Development (USAID), has signed a 5-year “bilateral agreement” worth “more than P10.5 billion” in peso terms.

“New programs and activities will promote inclusive, broad-based economic growth; improve the business environment; expand economic opportunities through private sector-led innovation for medium and small businesses; and increase information and communications technology access…,” the statement read.

Apart from these undertakings, the aid will fund “strengthening” partnerships between the government and civil society organizations to ensure the latter is included in planning policies. Transparency in the government as well as “advancing the rule of law and the justice system” will also be funded by the assistance.

While the aid agency did not provide specifics on actual programs that will be supported, USAID’s assistance for the Philippines was signed while the Duterte administration is ramping up borrowing to bridge a revenue gap due to the pandemic-inflicted economic damage.

As of Sept. 18, finance department data showed the government has secured $9.41 billion from foreign loans and grants since March when the pandemic struck. By source, the Asian Development Bank remained the administration’s biggest lender. 

In March, USAID committed $2.7 million to the coronavirus disease-2019 (COVID-19) response, although it is unclear whether the funds were already distributed. The latest agreement is separate from that amount and has so far not been included in the government’s COVID-19 funding tally. 

“This new USAID and Department of Finance bilateral agreement will expand our support to help the Philippines achieve long-term, private sector-led economic growth and strengthen economic governance,” USAID Mission Director Lawrence Hardy II was quoted as saying in the statement.

“These programs will create jobs and help ensure more inclusive, broad-based economic development,” he added.

As it is, the borrowing agreement between the finance agency and USAID is just part of a broader 5-year assistance to the Philippines worth $675 million this year. Other financing arrangements were secured by the health department to fight tuberculosis, remove drug dependence and promote family planning as well as the National Economic and Development Authority for environmental protection and energy security.

The education department, meanwhile, secured USAID support to expand science and mathematics curricula and fund technical skills development, among others.