The Asian Development Bank said Thursday it plans to lend $7.8 billion to the Philippines until 2021 mainly to support infrastructure projects, including two major railways.
The target loan amount is a part of the new six-year country partnership strategy approved by the ADB board of directors that lays out the bank’s support to the Philippine government in sustaining high and inclusive economic growth.
Under the new strategy, ADB said it was expecting to lend an estimated $7.8 billion, or nearly $2 billion annually, from 2018 to 2021, the highest for any four-year period. The annual average also doubles the current estimated yearly lending pipeline.
ADB said it would actively pursue co-financing arrangements with development partners to better assist the government attains its goal of lowering poverty to 14 percent of the population by 2022.
Under the new strategy, ADB’s programs and projects in the Philippines will focus on three priority areas: accelerating infrastructure and long-term investments, promoting local economic development in Mindanao and Visayas, and investing in people.
“Our country partnership strategy aims to improve the standard of living of Filipinos, particularly the poorest half of the population, and allow them to feel the benefits of a growing economy through better education, jobs, and income opportunities. Our operations are leveraging resources to support the government’s transformative social and economic agenda,” said ADB vice-president Stephen Groff.
It said that to sustain the country’s high growth rate, investments in climate-resilient infrastructure to significantly improve links between regions, communities, and people needed to be increased.
ADB said it would rebalance its financing assistance to support the Philippine government’s massive ‘Build, Build, Build’ infrastructure development program to address connectivity issues, allowing the country to catch up with its regional peers in infrastructure competitiveness and achieve its goal of reaching upper middle-income status by 2022.
Reflecting the rebalanced lending pipeline, transport will make up 47 percent of ADB’s Philippine operations from 2018 to 2021, up from 2.2 percent in the last seven years.
Projects include big-ticket items such as the Malolos-Clark Railway, North-South Commuter Rail, Metro Manila Bridges, Bataan-Cavite Long-Span Bridge, and Edsa Greenways projects. ADB will also support capital market development, private sector participation, and innovations such as green finance solutions to create more options for long-term infrastructure finance.
ADB said it would put greater focus on local economic development, especially in the Visayas and Mindanao, to address wide income disparities across regions and mitigate the impact of natural disasters.
The Ortigas-based multilateral lender said it would assist local governments in policy reforms, capacity development, building livable cities and disaster risk management and in tapping private capital for their infrastructure needs.
Investing in the poor is necessary to address income inequalities, it said. ADB said it would support policies and programs that seek to strengthen people’s capacities to gain better jobs and participate fully in society.
These include increasing access to quality secondary education, jobs market for the youth and unemployed, financial services, social protection and finding innovative ways to deliver social services.
ADB’s new partnership strategy incorporates gender equality, private sector development, governance and environmental sustainability across the three priority areas.
The strategy is aligned with the government’s long-term development plan AmBisyon Natin (Our Ambition) 2040, the medium-term Philippine Development Plan. It is the first partnership strategy to be developed in line with ADB’s Strategy 2030 approved in July.