Phl graduates to upper-middle class status

The three loans are part of ADB’s total integrated package of $2.5 billion of new assistance to the Philippines in 2019. #Philippineloans #carlosdomingueziii

Finance Secretary Carlos Dominguez III (left) and ADB Vice President Ahmed Saeed exchange notes during the loan signing Friday, 13 December 2019. (DoF)

The country’s loans from multilateral lender Asian Development Bank (ADB) are expected to incur higher interest rates when it graduates to upper-middle class status next year, Department of Finance (DoF) Secretary Carlos Dominguez III said on Friday.

“We are at a crucial turning point. Our economy has sustained high growth. The poverty rate has significantly declined and unemployment is at its lowest rate in 40 years. We expect to graduate to upper-middle-income country status way ahead of our schedule next year,” Dominguez said during the signing of three loan agreements with ADB worth $623.3 million.

“We have decisively broken out of the former boom-and-bust cycle that inhibited our projects in the past. We are consolidating for rapid and inclusive growth well into the foreseeable future,” Dominguez said.

Meanwhile, ADB Vice President Ahmed Saeed said the Philippine loans consisting of $400 million for the Youth School to Work Transition Program, $200 million for the Infrastructure Preparation and Innovation Facility, and $23.3 million for the Capacity Building to Foster Competition Project will help the bank ramp up their lending.

“We want (our money) to be used quickly and effectively…The three loans are part of ADB’s total integrated package of $2.5 billion of new assistance to the Philippines in 2019 – our highest lending program ever. This reflects the Government’s clarity of vision and our strong commitment to supporting your efforts,” Saeed said.

“These projects support important elements of the Government’s reform agenda in critical areas: including infrastructure, supporting a healthy, competitive domestic market, and generating quality jobs for young Filipinos,” Saeed added.

Philippine Competition Commission Chairman Arsenio Balisacan said that the additional loans would help bolster the competition policy regime in the country along with the establishment of the necessary human capacity for such.

“One of the factors that have hindered inclusive development and rapid growth in the Philippines…is the severe restrictions in the Philippine economic landscape with respect to investments, various entry and so forth and clearly, a lot of these came from anti-competitive practices,” Balisacan said.

“With this assistance, we will be able to build that human capacity, we will be able to send more people to pursue specialization in competition law and policy and we will be able to build in the Philippines a center of excellence that will produce a manpower for competition policy and reinforcement,” he added.

The Philippines’ total loan obligation to ADB amounted to $7.2 billion in the past 10 years. For 2019, ADB’s loan financing totaled to around $2.5 billion while an additional $7.8 billion loan was scheduled for the next two years, bringing the overall obligations to $10.3 billion over the medium term.