Metro Manila (CNN Philippines, June 29) — The Philippines has secured a fresh €250-million loan, equivalent to about ₱14 billion, from a France-based development agency to help stimulate economic activity amid the coronavirus pandemic.
The Department of Finance (DOF) said Monday that the Agence Française de Développement (AFD) signed two credit facility agreements to support the economy, aimed at expanding financial services to vulnerable sectors and increasing private sector participation in infrastructure projects.
Finance Secretary Carlos Dominguez III and French Ambassador to the Philippines and to Micronesia Nicolas Galey signed the loan agreements on June 9.
“The Philippine government is grateful to the Agence Française de Développement (AFD) for co-financing with the Asian Development Bank (ADB) two programs supportive of President Duterte’s overriding goal of accelerating infrastructure development in order to spur high growth, attract investments, create jobs and achieve financial inclusion for all Filipinos,” Dominguez said in a statement.
Both programs, which are co-financed by the Asian Development Bank, aim to support and strengthen the Philippine economy post-pandemic.
According to the DOF, the Inclusive Finance Development Program (IFDP) worth €100 million will provide additional funding to government’s initiatives to expand financial services across the country, especially among small entrepreneurs, farmers and fisherfolk, women and other vulnerable sectors.
Meanwhile, the Expanding Private Participation in Infrastructure Program (EPPIP), which is worth €150 million, is aimed at improving private sector participation in infrastructure financing in line with the administration’s “Build, Build, Build” program.
Dominguez said that President Rodrigo Duterte has again put the “Build, Build, Build” program on fast track during the pandemic, given that infrastructure investments have the highest multiplier effect on the economy, particularly in terms of job creation.
“Such financial support from the country’s development partners like AFD for our priority programs is crucial at this time when the Philippine government is embarking on its resource-intensive, four-pillar strategy to suppress the coronavirus outbreak and provide relief to our most affected sectors while restarting the stalled economy to a quick recovery from the global economic slump induced by the lethal virus,” Dominguez said.
The DOF said the France-based lender will also finance a €1.5 million Technical Assistance (TA) program in partnership with the Bangko Sentral ng Pilipinas and the Rural Bankers Association of the Philippines, aimed at strengthening the capacities of financial inclusion stakeholders and accelerating the digital transformation of the country’s financial institutions.
Apart from the fresh €250 million loan, the DOF is also exploring additional funding from other European financial institutions.
“Discussions are underway to secure additional funding from the European Union’s Asian Investment Facility in the form of a grant to be channeled through the Philippines’ PPP Center,” the DOF said in a statement.
“The proposed grant aims to facilitate and encourage the development of sustainable PPP projects at the local level, both in terms of promoting resilient infrastructure and in the mitigation of greenhouse gas emissions. Stimulating the development of health infrastructure will be a key component of the forthcoming European Union support,” the agency added.
By CNN Philippines Staff
June 29, 2020