The Asian Development Bank is extending $7.54 billion worth of loans to the Philippines starting next year until 2021, according to the ADB’s updated Country Operations Business Plan (COBP).
In a document released this month, the projects will amount to a total cost of $9.21 billion, but only $7.54 billion will be financed using the ADB’s Ordinary Capital Resources (OCR). The remaining funds needed for the projects will be financed through cofinancing with other development agencies and partners.
The ADB will be financing around eight to 11 projects annually starting 2019 in its firm pipeline for the next three years. The other projects that were included are placed on standby between 2019 and 2021.
“[The COBP’s] three strategic pillars [are] accelerating infrastructure and long-term investments; promoting local economic development; and investing in people,” the ADB said.
“It supports the government’s priorities embedded in the Philippine Development Plan 2017-2022 to raise the country’s potential growth trajectory and reduce poverty incidence and income inequalities,” it added.
The ADB’s largest loan assistance worth $1 billion will be allocated for the Malolos-Clark Railway Project. The project has a total cost of $2 billion with the rest of the financing to be obtained from the Japan International Cooperation Agency (Jica).
The project will support the construction of the 51-kilometer (km) section of a new railway line connecting Metro Manila and the regional center in Clark and the Clark International Airport, located in the Central Luzon region around 100 kilometers north of Manila.
The ADB said the government is also constructing the 37-km Tutuban-Malolos section with financial support from Jica. It is also planned to further extend the project toward the north by 18 km to connect the New Clark City to Clark as Phase 2 in the future.
“The new railway line will provide affordable, reliable and safe public transport, reduce greenhouse-gas emissions and cut the journey time by half to less than one hour. The project will be cofinanced by Jica,” the ADB said.
Meanwhile, the ADB also included in its COBP the list of nonlending products and services to be extended to the Philippines worth $9.75 billion between 2019 and 2021.
Data showed that in 2019, the ADB will extend $7.75 billion for Support for Capital Market Generated Infra Financing; Strengthening Infrastructure Capacity and Innovation for Inclusive Growth (additional financing); and Philippines’s Fourth Industrial Revolution.
The ADB’s Support for Capital Market Generated Infra Financing and Strengthening Infrastructure Capacity and Innovation for Inclusive Growth will receive transaction technical assistance (TRTA), while the Philippines’s Fourth Industrial Revolution will receive knowledge and support technical assistance.
The Manila-based multilateral development bank will extend $1 billion worth TRTA for Support for Local Governance Reform Program in 2020 and Support to Facilitating Youth School-to-Work Transition.
The COBP also aims to include greater support for Mindanao’s development, particularly in the areas of infrastructure, capacity building specifically for local governments, education and skills training, youth employment and disaster-risk management.
The ADB has been helping the Philippine government promote growth, development and peace in Mindanao, starting with key infrastructure projects in rural areas in the late-1960s to early-1970s to increase farm productivity and income.
The ADB is committed to achieving a prosperous, inclusive, resilient and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.
Established in 1966, the ADB is owned by 67 member. In 2017 its operations totaled $32.2 billion, including $11.9 billion in cofinancing.