The government and the Asian Development Bank on Wednesday signed a $680-million loan agreement intended for a Mindanao road project and the capital market reforms program.
The Improving Growth Corridors in Mindanao Road Sector Project is supported by a $380-million loan from the ADB. Meanwhile, the Encouraging Investment through Capital Market Reforms Program (subprogram 2) is backed by a $300-million loan.
Finance Secretary Carlos Dominguez III and ADB president Takehiko Nakao signed the agreement at the ADB headquarters in Mandaluyong City.
“ADB’s support is vital in the realization of our development goals. The road project in Mindanao will improve growth corridors in the area… This this is part of our ‘Build, Build, Build’ program,” Dominguez said.
The capital markets reforms program would encourage investments in the country, Dominguez said.
“We look for more areas of cooperation in the coming days,” Dominguez said.
Nakao said ADB’s support for the two important projects would help address one of the most critical constraints to the country’s growth prospects, which was infrastructure.
“Both projects align with the government’s development strategy under the Philippine Development Plan 2017-2022. The two projects are part of a total $1.08-billion in new assistance to Philippines in 2017,” Nakao said.
“Last year’s $1.08-billion assistance reflects ADB’s commitment to scaling up our support to the Philippines and its development agenda,” Nakao said.
Nakao said the Improving Growth Corridors in Mindanao Road Sector project was particularly important because Mindanao is the second largest island in the country and home to about a fifth of the Philippines’ total population with the highest poverty incidence among the country’s three island groups.
Nakao said addressing Mindanao’s road connectivity constraints would help unlock its potential as a major contributor to the country’s overall growth.
“The project is ADB’s first support for a regional project under the government’s flagship ‘Build, Build, Build’ infrastructure development program. This project is consistent with our work over the past five decades to support the government’s efforts to improve the lives and livelihood of the people of Mindanao,” Nakao said.
Public Works Secretary Mark Villar said the road network project in Mindanao, covering the Zamboanga peninsula and Tawi-Tawi, were already in the planning stage.
Villar said the Zamboanga project would start in the first quarter this year while the Tawi-Tawi project would be completed in two years.
The Encouraging Investment through Capital Market Reforms Program (subprogram 2) is expected to increase the amount of long-term finance, both public and private, needed to fund the government’s infrastructure projects.
Bangko Sentral Deputy Governor Diwa Guinigundo said the capital market reforms project would result in the deepening of the bond market including the enhancement of liquidity in the market.
“This will also promote Asean capital market integration,” Guinigundo said.
Nakao said ADB supported the government’s financial sector reforms over the past decade and the multilateral lender would continue to assist the important sector.