THE Asian Development Bank (ADB) is hiking its lending to the Philippines for 2020 to 2022 amid Manila’s continuous efforts to resolve the worsening traffic congestion in major cities and rapid urbanization.
ADB Philippines Country Manager Kelly Bird said the Manila-based multilateral development bank will extend a total of $9.1 billion in loans to the Philippine government in the next three years.
Bird said this translates to $2.5 billion a year, making the Philippines the ADB’s third-largest borrower. The figure is higher than the annual average of $800 million in loans that the ADB usually extends to the Philippines.
“Not only have we scaled up our program, but we’ve rebalanced it as well, focusing now on transportation, which accounts for 60 percent of our lending program,” he told reporters in a news briefing on Mandaluyong City on Thursday.
The ADB’s largest project in the Philippines is the $2.75-billion Malolos-Clark Railway Project. It involves the construction of a 51.2-kilometer railway that will connect Clark Airport in Pampanga to Malolos, Bulacan.
The bank said the Malolos-Clark Railway Project is also the largest project it is financing to date. Contracts for civil works for the project are expected to be awarded before the end of the year and construction work may begin in the second quarter of 2020.
Apart from the railway project, ADB is also financing eight key road and transportation projects which are up for approval by the ADB Board and the Philippine government next year and in 2021.
The projects up for approval next year are the $1.2-billion South Commuter Railway project, $180-million Metro Manila Bridges Project, $100-million Edsa Greenways Project; and $70-million Davao Public Transport Modernization Project.
Those that may be approved in 2021 are the $500-million Metro Rail Transit Line 4 project, $500-million Bataan-Cavite Bridge Project, $500-million Laguna Lakeshore Road Transport project and the second tranche of the Malolos-Clark Railway project costing $1 billion.
The ADB said it is preparing additional financing this year for the Infrastructure Preparation and Innovation Facility to support detailed engineering designs and feasibility studies for the government’s priority projects under the BBB program.
“This will ensure a steady flow of investments into much-needed infrastructure projects that are viable and innovative,” the bank said.
Agri investments
Apart from road and transportation projects, the sectors that will also receive the largest portion of ADB’s lending to the Philippines in the next three years are Public Sector Management (PSM) and Agriculture and Natural Resources (ANR).
Bird said projects under PSM now account for 14 percent of its lending while those under ANR account for 10 percent. While PSM has always taken a large portion of ADB’s assistance, the bank said it has decided to hike its investments in ANR.
He said prior to the Country Operations Business Plan (COBP) 2020–2022, ADB’s lending for ANR accounted for only 1.6 percent.
“We’re ramping up for two reasons. One is the agriculture sector has been a drag on economic growth for the last two to three years; it’s been less than 1 percent. And, and you still have a large segment of the population reliant on agriculture,” Bird said.
“The government has now implemented some major reforms that will help set the agriculture sector on a par for improved competitiveness. And what [the ADB is] doing now is implementing some programs and projects that are going to support that,” he added.
Some of these projects are the $300-million Support for Agrifood System Competitiveness Program and the $100-million Mindanao Irrigation Development Project.
The ADB said it is preparing the Integrated Flood Risk Management Sector project for 2020, which will focus on six river basins across the country.
The bank’s 2020 program will include financing for the Expanded Social Assistance project, which will build on a decade of ADB assistance to the government’s conditional cash transfer program and support for the government’s agricultural competitiveness program.
“This latest Country Operations Business Plan reflects ADB’s strong commitment to supporting the Philippines’s efforts to sustain inclusive economic growth, create business and job opportunities in the regions, and widen the reach of the government’s education, health, and social protection programs,” said Bird.
In 2018, the ADB made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from Asia and the Pacific.