THE GOVERNMENT and the Asian Development Bank (ADB) signed on Wednesday a loan agreement for a series of road projects in the southern Philippines, and exchanged documents on capital market reform projects.
ADB President Takehiko Nakao and Finance Secretary Carlos G. Dominguez III, this year’s chairman of the ADB Board of Governors, signed the $380-million loan agreement for the Improving Growth Corridors in Mindanao Road Sector Project, and exchanged documents on the $300-million Encouraging Investment through Capital Market Reforms (EICMR) Program-Subprogram 2.
The first loan program involves the construction of about 280 kilometers of national primary, secondary and tertiary roads and bridges in the Zamboanga Peninsula and Tawi-Tawi.
The project is to be implemented by the Department of Public Works and Highways (DPWH), and expects road contracts to be bid out by this quarter. Bridge contracts are expected to be put up for bidding by the third quarter.
DPWH Secretary Mark A. Villar said that he expects “substantial completion of roads within this year.”
The project is intended to aid in developing Mindanao’s economy, paving the way for “achieving peace and prosperity for the region,” according to Mr. Dominguez.
“The projects funded by this loan cohere with the comprehensive logistics improvement pursued under the Duterte administration. This is part of our Build, Build, Build program,” Mr. Dominguez said.
For his part, Mr. Nakao said that the region is “an important component of ADB’s work in the Philippines.”
“This project, ADB’s first Mindanao-specific loan in 16 years, builds on our strong partnership with the government over the last five decades to develop the infrastructure and economy of the country’s second-largest island,” he said.
The capital market reform project meanwhile is intended to aid in accelerating investments in infrastructure by establishing a framework to diversify and broaden available funding sources from the private sector market.
This was the follow-up of the implementation of reforms committed under Subprogram 1, which included, among others, the launching of the modern National Registry of Scripless Securities (NRoSS), the Government Securities Repurchase Agreement (Repo) Program, and the enhanced Government Securities Eligible Dealers (GSED) Program; the implementation of the Personal Equity and Retirement Account (PERA); and the issuance of a Code of Corporate Governance for publicly listed companies.
“Modernization of our capital markets and infrastructure backbone are the two main tasks the Duterte administration seeks to accomplish over the next five years. These two loan packages fall squarely into the national priorities we have identified,” Mr. Dominguez said.
He said the $300-million loan program to finance continuing capital market reforms is “vital to encouraging investments in the economy and broadening public participation in the capital market.”
He said implementing reforms will open new avenues for private investment in the government’s infrastructure drive.
He said that this will, in turn, ease the movement of people and goods, broaden access by producers to markets, boost the competitiveness of tourism and exports, reduce production costs, and create more job opportunities.
“Although we have improved fiscal capacity to fund the infrastructure program through tax reforms, private investments will carry a major part of the load,” Mr. Dominguez said.
“By making our financial markets more efficient and more accessible to all citizens, by encouraging long-term savings and increased capital aggregation, we will ensure continuous financial flows towards modernizing our infrastructure backbone and our national logistics system,” he added. — Elijah Joseph C. Tubayan