(Eagle News) — The Philippine government has secured a loan agreement from the Asian Development Bank that would enable the country to get $1.5 billion budgetary support for its efforts on the COVID-19 pandemic.
This came in time as funds to support the government’s programs to beat COVID-19 and to support its people under lockdown as President Rodrigo
Duterte decided to extend the enhanced community quarantine in the Philippine capital of Metro Manila and nearby provinces, as well as in other areas with high COVID-19 cases.
The ECQ, supposed to end on April 30, was extended until May 15 to ensure that the COVID-19 spread is curbed.
The loan for the COVID-19 Active Response and Expenditure Support (CARES) program of the Philippine government covered by this agreement is under the ADB’s Countercyclical Support Facility Pandemic Response Option (CPRO), the Department of Finance (DOF) said.
This is a quick-disbursing budget-support facility to aid countries like the Philippines in mitigating the severe economic shocks caused by the COVID-19 pandemic and bankrolling measures to prevent the further spread of the highly contagious virus, the DOF explained.
Finance Secretary Carlos Dominguez III signed the loan agreement on behalf of the Philippine government on Thursday while ADB Country Director for the Philippines Kelly Bird signed on behalf of the Bank.
-Bridging deficit requirement-
Dominguez explained that the agreement for the CARES loan is part of the national government’s external financing program this year to help fund the necessary programs to defeat COVID-19 and bridge the higher deficit requirement estimated at P990.1 billion (around US$19.5 billion) brought about by the pandemic’s economic fallout.
“We thank the ADB under the leadership of President Masatsugu Asakawa for swiftly responding to the Philippines’ call for funding support in this time of crisis. We thank the Bank as well for streamlining its operations to quickly deliver its assistance and for tripling the size of its response package from US$6.5 billion to US$20 billion to help developing member-countries combat COVID-19,” Secretary Dominguez said.
Under the terms and conditions of the CARES loan, the first US$500 million that the Philippines can tap from the ADB’s CPRO facility, or its support for the pandemic response.
It will be disbursed in US dollars amounting to US$ 250 million, and the Euro equivalent of the other half of the amount.
This portion of the loan is payable in 10 years inclusive of a three-year grace period, the DOF said.
The remaining US$1 billion will also be divided equally into the US dollar and Euro equivalents of the amount under the terms of the loan accord.
This amount is payable in five years inclusive of a three-year grace period, according to ADB.
The disbursement of the first US$1 billion tranche is expected this month while the remaining US$500 million may be disbursed on or before June 20.
ADB President Asakawa reiterated the ADB’s strong commitment to providing swift and effective assistance to help the Philippines mitigate the economic and social impacts of the pandemic.
“Our new financing, the largest budget support ever to the Philippines, is part of a well-sequenced support package that will provide financial and technical advice to help the government meet the challenges posed by a crisis that is wreaking havoc both globally and nationally,” Asakawa said.
-ADB commends PHL “strong leadership”-
He also commended the Philippine government for “its strong leadership and decisive actions to halt the spread of COVID-19 and quickly implementing financial assistance packages to families and small businesses to address the economic downturn.”
The DOF revealed that the ADB was “among the first multilateral development institutions to provide assistance to the Philippines’ COVID response efforts with its delivery of a US$3-million grant for the government’s purchase of medical supplies for health workers.”
It has also approved an emergency grant of US$5 million for the Philippines to leverage private-sector donations for a food distribution program that has benefited 55,000 poor households in Metro Manila and neighboring areas.
The food distribution program was implemented in coordination with the Departments of Finance (DOF), of Social Welfare and Development (DSWD) and of the Interior and Local Government (DILG), and the Armed Forces of the Philippines (AFP).
(Eagle News Service)
