The Asian Development Bank (ADB) said it will boost its sovereign lending to the Philippines by 66 percent to $3 billion between 2016 and 2018 using its expanded lending capacity.
The Manila-based lender on Tuesday announced it is prepared to increase its sovereign lending for the country between 2016 and 2018 to about $3 billion from $1.8 billion in 2015 to 2017.
The announcement was made after a meeting between ADB President Takehiko Nakao and Finance Secretary Cesar Purisima to discuss the lender’s deepening partnership with the Philippines.
Nakao said the ADB will continue to support infrastructure needs; programs to strengthen senior high school education, job creation for youth, and social protection; deeper capital markets; improved access to finance; and development in the southern Philippines including Mindanao.
PPP success noted
“We are pleased to see the recent progress made by the government in its public-private partnership (PPP) program and will continue to support its implementation,” he said.
One of the recent examples of PPP projects, assisted by an ADB private-sector loan of $75 million, is the Mactan-Cebu International Passenger Terminal Project, for which construction commenced in June, the bank said in a statement.
Earlier this year, the lender’s Office of PPP, together with its co-advisor the Development Bank of the Philippines, was appointed as Transaction Advisor for the North-South Railway Project South Line (Manila to Legaspi with extensions to Batangas and Matnog). The government has already initiated the bid pre-qualification process.
The ADB president said that once implemented, the project would help transform the railway sector in the Philippines to offer efficient and affordable services, enhancing connectivity and boosting economic productivity.
Nakao also described ADB’s phased approach to deepening capital markets and expanding non-bank finance through two ADB programs planned in the next three years.
A capital reform program in 2017 will help boost access to non-bank finance through bond market development, promotion of long-term savings, and improving Treasury operations.
A financial inclusion project the following year aims to increase the number of poor and near-poor participating in the financial system, boosting their access to housing finance, small and medium enterprise credit, and microfinance credit, Nakao explained.
Disaster & development funding
The lender is also seeking to deepen its partnership with the government on disaster risk financing, especially at the local government level.
This would be in addition to ADB’s support for areas affected by 2013’s Typhoon Yolanda.
The lender committed $900 million assistance for Yolanda rehabilitation and reconstruction, of which about $650 million has already been disbursed, according to the lender.
Furthermore, the ADB president reiterated the lender’s commitment to supporting the government in its effort to bring lasting peace and development to Mindanao and the Bangsamoro areas.
ADB has worked with the local authorities in the preparation of the Bangsamoro Development Plan and on various projects to develop road infrastructure and a transport master plan.
The lender plans to follow this up with an Adult Literacy and Livelihood grant program for the region.
ADB also said it is working with the National Economic Development Authority to prepare technical studies as part of the creation of a long-term strategic development vision for the Philippines.
Since 1966, the lender has been a strong development partner of the Philippines, its host country, approving a cumulative total of $15.7 billion in assistance as of the end of 2014.
The ADB country partnership strategy for 2011-2016 focuses on improving the investment climate, more effectively delivering social services, and minimizing disaster risks.
For his part, Purisima thanked the lender for its continued partnership with the Philippines.
“Our country has more than proven its mettle throughout the past five years writing a comeback story of growth and better governance. Deepening support from ADB in sustaining these reforms is critical—we need quality education and infrastructure to fuel further inclusive growth,” he said,
“The Philippines welcomes the hand extended in partnership with an unequivocal vow to press on. Filipinos have seen what we can achieve with good governance and are ready to dream of bigger things,” he added.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region. In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion.