The Asian Development Bank (ADB) said Wednesday it approved a $500-million policy-based loan to help the Philippines pursue its public financial management (PFM) reform agenda and ensure quality public services for the Filipino people.
The Public Financial Management Reform Program (Subprogram 1) will improve national budget frameworks, empower local governments and establish a PFM system in the country’s Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
“This new program signifies the Philippine government’s commitment to building an open government founded on the principles of efficiency, transparency, accountability, and good governance,” said ADB Philippines country director Pavit Ramachandran.
“The program not only strengthens the efficiency and transparency of public funds, but also promotes private sector roles in public services, as well as climate resilience and preparedness for Filipinos,” he said.
The program is anchored in the government’s PFM Reforms Roadmap 2024‒2028, developed in partnership with ADB and endorsed by President Ferdinand Marcos Jr.
Its features include the digital transformation of PFM systems and creating an enabling regulatory framework for public–private partnerships.
The program promotes the fair and effective devolution of public services under the Mandanas ruling and fosters local investments in climate resilience and disaster preparedness.
The Mandanas ruling mandates that all national taxes and other taxes and fees collected by the national government be considered in computing revenue allotments to local government units.
The program fosters peacebuilding in BARMM, recognizing that fiscal autonomy and accountability underpin trust between the Bangsamoro government and its citizens. It supports the Bangsamoro government’s own PFM systems, including local governance, budgeting and revenue frameworks.
The ADB, together with the Public Expenditure and Financial Accountability (PEFA) Secretariat and other development partners, will conduct the PEFA Assessment to guide the country’s PFM reform pathway.
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, it is owned by 69 members—49 from the region.
