THE Philippines signed the $500-million loan agreement with the Asian Development Bank (ADB) that will supplement the budget of the Pantawid Pamilyang Pilipino Program (4Ps), largely for disbursement in July.
In a statement Wednesday, the Department of Finance (DoF) said Finance Secretary Carlos G. Dominguez III and ADB Country Director for the Philippines Kelly Bird signed the loan agreement for the Expanded Social Assistance Project (ESAP) two days earlier.
Of the total, around $450 million is earmarked for “accelerated disbursement” next month.
According to Mr. Dominguez, the loans can also be used to fund programs to contain the coronavirus disease 2019 (COVID-19) pandemic.
“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,” he was quoted as saying.
The ADB approved the ESAP loan on June 10, supplementing the funds of the conditional cash transfer program known as 4Ps run by the Department of Social Welfare and Development.
The loan has a term of 29 years, including an eight-year grace period, the DoF said.
The ADB will also provide technical assistance valued at $3.1 million to improve implementation of the conditional cash transfer program.
The ADB’s total lending to the Philippines thus hit a record $2.6 billion so far this year, exceeding the $2.5 billion it extended in 2019.
As of June 5, the government’s total foreign borrowings for its COVID-19 containment effort hit $6.508 billion, including bonds and grants.
The government borrows from domestic and foreign lenders to plug its funding shortfall estimated at P1.612 trillion this year or 8.4% of gross domestic product as revenue plunges and pandemic expenses accelerate. — Beatrice M. Laforga