The Philippine government secured a fresh $500-million (P25-billion) financing package from the Asian Development Bank to support the country’s immediate budgetary requirements to address the coronavirus crisis.
The budget-support loan under the Expanded Social Assistance Project is part of the government’s external financing program for 2020, with $450 million of the fund proposed for accelerated disbursement by next month, according to the Department of Finance.
Finance Secretary Carlos Dominguez III and ADB country director for the Philippines Kelly Bird signed the loan agreement on June 15.
“We thank the ADB for again extending its support to our sustained efforts to mitigate the impact of the COVID-19 pandemic on our economy and our people. This budget-support loan will not only help bridge our funding gap for our COVID-19 response but will also strengthen our social protection program as we restart our economy and help people get back on their feet amid the pandemic,” Dominguez said.
The ESAP, which builds on a decade of ADB’s support for social protection programs in the Philippines, aims to assist the government in the continued implementation of its conditional cash transfer initiative dubbed the Pantawid Pamilyang Pilipino Program.
The $500-million loan aims to continue funding education and health grants to eligible 4Ps household-beneficiaries for a period of four years starting 2020.
ADB Vice President Saeed said, “the 4Ps program provides vulnerable households with an income supplement to help their children become educated, stay healthy and leave poverty for good.
“Our evidence shows that this is working. The 4Ps program has helped 1.5 million people escape poverty since it began in 2008. Through this project loan and technical assistance support, ADB is helping the Philippines expand these gains,” Saeed said.
The ADB said it would also provide a $3.1-million technical assistance grant to “help improve the family and youth development sessions, update the list of eligible poor households, provide a package of livelihood and other support to help up to 3,000 households graduate out of poverty, support information technology reforms to automate compliance verification and grievance redress and prepare for the integration of the 4Ps database with the government’s national ID system.
The ESAP loan, which covers a maturity period of 29 years inclusive of an 8-year grace period, brings to $2.6 billion the total financing package extended by the ADB so far to the Philippines for its programs to address the COVID-19 crisis.
The Philippines and ADB signed an agreement on June 4 for a $400-million loan for the Support to Capital Market Generated Infrastructure Financing, Subprogram 1 that aims to assist the government’s efforts to strengthen domestic capital markets as the country recovers from the economic fallout triggered by the COVID-19 pandemic.
They also signed $200-million loan accord on April 28 to provide additional financing for the government’s efforts to provide unconditional emergency cash assistance to poor and vulnerable households hit the hardest by the work stoppages following the imposition of strict quarantine measures to contain the outbreak.