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THE
Asian Development Bank on Thursday approved a
$250-million loan to support the Philippines’ continuing
policy reforms, particularly its efforts to improve
investment climate, public finances and provide support
to the poor.
“The
Development Policy Support Program will help further
expand the size of its economy, cut poverty and create
jobs,” said Tom Crouch, country director for the
Philippines,
in a statement.
The loan
will have a 15-year term, including a grace period of
three years, with interest determined by London
Interbank Offered Rate (Libor).
The bank
noted “robust economic growth and an improved fiscal
situation” have begun to enhance investor perceptions
about the medium-term outlook for the local economy,
supported by a steady increase in capital flows and the
continued strengthening of the peso.
It also
lauded government efforts to reduce consolidated public
sector deficit, which declined to an estimated 0.9-1.0
percent last year from a peak of 5.2 percent in 2003.
But it added that challenges remain, especially on
creating jobs.
“Employment growth has been modest and it has to grow
more to offset the increased size of the workforce,”
said the bank.
The
Development Policy Support Program is the instrument for
addressing the problems noted by the bank and which is
included in the government’s Medium Term Philippine
Development Plan.
Among
the results aimed at with the new loan are better fiscal
sustainability, economic stability, and improved
creditworthiness through stronger tax collection and
administration, more efficient spending, and a stronger
debt-management strategy.
“Strengthening tax collection and management, as well as
reducing corruption, will enable the government to spend
more on programs which help the neediest members of
society,” said Crouch. |
