Duterte administration can tap $25.6 billion from ADB for social services, infra projects

In Photo: The ADB lending pipeline will help finance railway projects.

The Department of Finance (DOF) said the government can tap $25.6 billion from the Asian Development Bank (ADB) to help finance the Duterte administration’s social services programs and infrastructure projects.

According to the DOF’s International Finance Group (IFG), the Philippines can tap around $3.8 billion in loans and $21.8 billion in the form of nonlending programs from the ADB to fund the Duterte administration’s socioeconomic programs.

The lending pipeline under the ADB’s Country Operations Business Plan (COBP) for the Philippines will focus on three priority areas, including $1.8 billion, or 47.4 percent of the proposed funds for infrastructure development; $1.5 billion, or 39.5 percent of the fund for education and skills development, access to finance, expanded social protection and employment opportunities for the youth; and $500 million, or 13.1 percent for programs on good governance and finance.

ADB’s COBP for the Philippines will cover the period 2018 to 2020.

“Program loans under the proposed lending pipeline make up 39 percent of the COBP while project loans account for 61 percent,” the IFG said in its report to Finance Secretary Carlos G. Dominguez III at a recent DOF Executive Committee meeting.

The IFG added that the ADB has agreed to explore cofinancing arrangements with the Japan International Cooperation Agency (Jica) for the Philippines’s major infrastructure projects, such as the proposed Philippine National Railways’s Malolos-Clark Railway project and the PNR Commuter South Line project.

On this aspect, the ADB agreed to help the Philippines beef up its capacity in handling and financing infrastructure projects, particularly on the construction of the country’s railways.

The ADB also agreed to the country’s request to hold quarterly meetings, which will ensure that the partnership strategy is aligned with the government’s priorities under the Duterte administration.

“The bank has also responded positively to our request to increase the Philippines’s lending envelope and provide more grants and technical assistance,” the IFG said.

According to the IFG, the projects covered by the COBP for 2018 to 2020 include the Central Spine Roll-On/Roll-Off Project and the Mindanao River Basin Flood Control Project.

The DOF added that the ADB has committed to design a $300-million package of critical transportation infrastructure initiatives to ease Metro Manila traffic, and is now exploring the possibility of co-financing this initiative with other multilateral institutions, such as the Asian Infrastructure Investment Bank and the Agence Française de Développement.

For the nonlending component of the COBP, the programs include support for project preparations and capacity-building of various government agencies, the IFG added.

Image credits: Nonie Reyes

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