ADB extends Manila another $623.3M in loans

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.

Manila-based Asian Development Bank bares three more financing packages to help the Philippine regulators deal with competition, build infrastructure and develop its young population.

Multilateral lender Asian Development Bank (ADB) has approved a total $623.3 million worth of loans to the Philippines to support the country’s various development programs and initiatives.

The Department of Finance (DoF) signed three loan agreements with ADB that include financing support for the Youth School to Work Transition Program ($400 million), Capacity Building to Foster Competition Project ($23.3 million) and additional funding for the Infrastructure Preparation and Innovation Facility ($200 million).

Finance Secretary Carlos Dominguez III noted the loans come just as the economy transits to upper-middle class status next year when its foreign borrowings, expressed as interest charges, begins to cost more.

“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.

“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,” he added.

ADB vice president Ahmed Saeed shared the sentiment, saying the loans will help them ramp up 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,” he added.

Philippine Competition Commission (PCC) chairman Arsenio Balisacan said the additional loans would help bolster the competition policy regime in the country.

“One of the factors that 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 country’s total loan obligation to ADB amounted to $7.2 billion in the past 10 years. For 2019 alone, ADB loan financing totaled $2.5 billion and an additional $7.8 billion loan is scheduled for the next two years, bringing the overall obligations to $10.3 billion over the medium term.