THE ASIAN Development Bank (ADB) said on Thursday that its Board of Directors has approved a $7.8-billion lending pipeline for 2018-2021, ramping up support for transport infrastructure, local governance and social development in line with the Duterte administration’s priorities.
The total allocation for ADB’s new country partnership strategy with the Philippines is more than the $5 billion approved for 2011-2017.
About 47% of the total lending pipeline will go to transport, followed by public sector management with 21% and finance sector reform which will get 13%.
This compares to the previous program under which public sector management took the biggest share at 54%, followed by education and finance reform with 15% and 12%, respectively.
“This country partnership strategy really reflects a historic shift in our engagement with the Philippines and I think that shift has been provided by this government’s socioeconomic agenda.” ADB Country Director for the Philippines Kelly Bird said in roundtable discussions on Thursday at the ADB headquarters.
“Way back in 2005, it was already pointed out that infrastructure is a key constraint. And not only is it relatively poor compared to the other ASEAN (Association of Southeast Asian Nation) countries, but within the country the dispersion of infrastructure is disproportionate,” ADB Principal Country Specialist for the Philippines Joven Z. Balbosa said in the same briefing.
Projects include big-ticket items such as the Malolos-Clark Railway, North-South Commuter Rail, Metro Manila Bridges and Bataan-Cavite Long-Span Bridge.
Mr. Balbosa said poverty incidence in the country is “still high”, even as he noted that “while there’s still is a lot that needs to be done, there are achievements so far; substantial achievements.”
He noted that investments in infrastructure are now equivalent to about five percent of gross domestic product (GDP), from an average of around two percent in 2010-2016.
The government aims to cut poverty incidence to 14% in 2022 from 21.6% in 2015, with infrastructure spending targeted to be equivalent to 7.3% of GDP by 2022 from last year’s 5.6%.
ADB’s lending program covers fields like physical connectivity investment, livable cities, water resource and disaster risk management, public infrastructure policy and planning development, capital market reforms, green finance solutions, promoting private participation in government infrastructure, assisting in local competition, tax policy reforms, improved public expenditure management, local government capacity development, coordinated regional planning, post-disaster recovery programs, improving the local business climate, improving local government credit-worthiness, financing for increased access to quality secondary education and technical vocational training, access to healthcare, improving financial literacy, adoption of financial technology solutions, expanded conditional cash transfer program, as well as facilitation of private sector and civil society engagement.
“So we are supporting the administration through infrastructure financing and also providing capacity to build those large infrastructure projects… these are huge undertakings,” said Mr. Bird, noting that the lender has already established the Infrastructure Preparation and Innovation Facility for the government, which was approved in October last year.
Mr. Balbosa said the ADB hopes to help change the mindset and improve the capacity of local governments to take charge of socioeconomic development within their jurisdiction.
“In our minds, federalism… is a political decision, but what is fundamental is… whatever state you have, you got to have a very strong local government. One of our projects on local development is on inter-local government cooperation,” he said.
“That’s why the mindset is beyond your territory, that’s the only way you can think of regions for states.” — Elijah Joseph C. Tubayan

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