The Department of Finance (DoF) and the Asian Development Bank (ADB) on Monday exchanged documents to expedite two loans worth $600 million.
The loans aim to help the government sustain efforts to expand financial services to small entrepreneurs and increase private sector participation in the infrastructure modernization program.
Exchanged were loan documents covering Subprogram 2 of the Expanding Private Participation in Infrastructure Program (EPPIP-2) and the Inclusive Finance Development Program (IFDP-1). Both programs have approved loans of $300 million each.
The 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, the DoF said.
On the other hand, 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.
Finance Secretary Carlos Dominguez 3rd said the two loan packages fell squarely into the national priorities of attaining financial inclusion and modernizing the country’s infrastructure backbone. “They (loan packages) will surely help us in achieving rapid, investments-led economic expansion,” he said.
Dominguez also thanked “the ADB for the confidence in our ability to implement these programs and the dedication we have in pushing our economy to be at par with our most competitive neighbors. We look forward to more areas of cooperation in the coming years as the Philippines emerges to meet the challenges of development.”
In response, ADB President Takehiko Nakao said ADB is planning to extend loans of up to $2.5 billion annually to the Philippines from 2019 to 2021 or a total of $7.4 billion over this three-year period to provide additional support for the government’s “Build, Build, Build” program. The amount is more than double ADB’s annual assistance from 2011 to 2017.
“ADB is committed to supporting the Philippine government as it pursues more inclusive growth across the archipelago. Boosting the government’s effort to build up infrastructure and expand financial services in underserved areas of the country will help reduce income inequality in the country, which has persisted despite sustained strong economic growth in recent years,” Nakao said.
BY MAYVELIN U. CARABALLO, TMT