ADB earmarks $4B for PHL lending program for 2024

THE ASIAN Development Bank (ADB) is allocating as much as $4 billion worth of loan financing for the Philippines annually starting next year through 2029 to support its development projects.

ADB Country Director for the Philippines Pavit Ramachandran said the multilateral lender is looking to earmark between $3.5 billion and $4 billion for the lending program in 2024.

“This year, we’re looking at about anywhere from $3.5 billion to $4 billion in terms of our lending. Next year, we expect a similar allocation and a lot of this is on infrastructure, not only urban mobility and connectivity, but also flood resilience,” he told reporters on the sidelines of a forum last week.

For next year’s lending program, Mr. Ramachandran said they already know which projects will be included.

“We just have to lock in the exact amounts and timelines with the government,” he added.

Mr. Ramachandran said the $3.5 billion to $4 billion range would likely be the earmarked lending program per year under the ADB’s new Country Partnership Strategy (CPS) from 2024 to 2029.

“I think we’re looking at that being the lending. It’s also consistent with what we’ve been doing now for the last two or three years, because these are large, complex infrastructure projects but also some budget support mixed in on some strategic areas. That will be about 30% of the overall program, the share of budget support (then) the remainder will be largely project investments,” he said.

The ADB is currently working on its CPS 2024-2029 for the Philippines. The current partnership strategy for 2018-2023 focuses on “policy reforms, institutional capacity development, and financing investments that promote high and inclusive growth.”

Mr. Ramachandran said the new CPS will likely be released by the second half of 2024, adding that consultations are currently ongoing.

The CPS will also have a strong focus on climate change and social protection.

“There will be a climate resilient infrastructure pillar, this is very much aligned with the flagship projects. We are supporting the preparation and development of a number of these on urban mobility, flood resilience, and connectivity,” Mr. Ramachandran said.

He said the ADB is supporting the Philippines’ transition to upper middle-income country by investing in health, education and social protection projects.

“We’re really trying to ramp up private sector engagement, both PPPs (public-private partnerships) which are very much part of the government’s agenda as well, in terms of delivery of infrastructure programs, but also dedicated private sector investment in green energy, digital development, and affordable housing,” Mr. Ramachandran said.

The ADB’s 2023 lending program is focused on eight projects and programs, four of which are policy-based loans aimed to support post-pandemic business recovery, reforms in the agriculture sector, and inclusive finance.

Before the end of the year, Mr. Ramachandran said he is hopeful that the $1.95-billion loan for the Bataan-Cavite Interlink Bridge Project will be approved by the ADB board.

“We are making good progress with it, one of the projects is of course the Bataan-Cavite interlink bridge over Manila Bay… we are trying to have it approved, it’s on a tight timeline,” he said.

Data from the ADB showed that the 32-kilometer bridge will “provide a permanent road link between the provinces of Bataan and Cavite, the key missing link in the road network of the National Capital Region, Central Luzon and Calabarzon regions.”

Mr. Ramachandran also noted that the ADB is working on supporting the government’s 197 infrastructure flagship projects (IFPs).

Meanwhile, the World Bank approved $600 million worth of financing for the Philippines to support the government’s digitalization efforts.

The multilateral lender said the country’s first Digital Transformation Development Policy Loan aims to support digital infrastructure policies, expand financial inclusion and boost growth of digital services.

“Greater adoption of digital technology can improve the efficiency and transparency of government services, empowering individuals who were previously far away from decision-making centers,” Ndiamé Diop, World Bank country director for the Philippines, said in a statement. — Luisa Maria Jacinta C. Jocson