MANILA -- Manila-based lender Asian Development Bank (ADB) vowed to increase funding to the Philippines in support of the government’s infrastructure program.
In his speech during ceremonial exchange of documents at the Department of Finance (DOF) Monday, ADB President Takehiko Nakao said they will double the average loans from 2019-21 to around USD2.5 billion annually.
“The reason we are increasing our lending is because we want to support BBB (Build, Build, Build) project of this administration,” he said.
The Duterte administration targets to spend at least PHP8 trillion until 2022 to ensure that necessary infrastructure are constructed.
Monday’s ceremony was for two loans namely, the Subprogram 2 of the Expanding Private Participation in Infrastructure Program (EPPIP-2) and the Inclusive Finance Development Program (IFDP-1), both of which amounts to USD300 million each.
IFDP-1 targets to make the domestic financial sector resilient and inclusive by increasing financial services to small businesses, farmers, workers, women and other vulnerable sectors.
The Finance chief said the government already hit several milestones under IFDP from March 2016 to April 2018 and this include the submission of draft legislation on the development of the national identification (ID) system, introduction of a framework to promote agriculture value chain finance; adoption of the National Retail Payments System; submission of legislation on the establishment of a modern secured transaction system, and approval of an innovative pilot project for a rural bank to migrate its physical core banking system to a cloud-based system.
Citing ADB data, the DOF said “only 34 percent of Filipino adults have bank accounts, compared with 82 percent in Thailand and 49 percent in Indonesia as of 2017.”
“Also, a 2017 Financial Inclusion Survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed that only 14 percent of Filipino adults borrowed from a formal financial institution,” it said.
On the other hand, EPPIP-2 will aid the government’s external financing requirements and will rely on the achievements in tapping private sector expertise and financing for the infrastructure program.
Dominguez said these loans are in line with the current government’s priorities.
“They will surely help us in achieving rapid, investments-led economic expansion," he said.
The Finance chief, thus, expressed appreciation to ADB for recognizing the government’s ability to implement BBB that would, in turn, allow it to further boost domestic expansion.
“We look forward to more areas of cooperation in the coming years as the Philippines emerges to meet the challenges of development,” he said. (PNA)
