ADB commits record P47-B loan to Duterte

As a show of commitment to the administration of President Duterte, the Asian Development Bank (ADB) offered last Friday an unprecedented $1 billion or P47 billion in sovereign loans to the country. 

During a meeting among ADB President Takehiko Nakao, Finance Secretary Carlos Dominguez III and Socioeconomic Planning Secretary Ernesto Pernia, the ADB pledged its strong partnership with the government on its socioeconomic and poverty-reduction priorities. Nakao said the ADB may increase the financial assistance further, based on future discussions with the new administration.

Dominguez said Nakao’s expression of support was based on the new administration’s 10-point agenda aiming for a strong and inclusive economy.

The ADB projects the country’s gross domestic product (GDP) to grow to 6 percent this year and 6.1 percent next year, due primarily to higher private consumption and investments. The growth estimates would be an improvement from the 5.9-percent actual growth rate achieved in 2015. The ADB also noted the local unemployment rate was at a historical low of 6.1 percent as of April, but added that challenges remain such as creating better jobs and reducing underemployment, especially in rural areas.

Nakao commended the Duterte administration’s aim of spreading the benefits of strong growth and recommended the harnessing the country’s young and educated population toward productivity and job creation, especially in small and medium enterprises, tourism and agribusiness.

The ADB said it would support accelerating public-private partnerships, rural and value chain in agriculture, human capital investment, including health and education, and conditional cash transfers. Nakao emphasized that the ADB can help in infrastructure development based on its extensive experience in many countries and access to global knowledge and advanced technologies. He reiterated the ADB’s efforts to pursue its Mindanao Development Program and in projects to improve the area’s linkages with national and regional markets. “The recent strong growth of the Philippines provides a foundation for further sustainable growth to fully realize this country’s enormous potential,” Nakao said.

Dominguez said the ADB’s full backing “would go a long way in helping President Duterte deliver on his electoral mandate to bring progress to all Filipinos.”

Nakao added that the ADB can help the country incorporate innovations in infrastructure development, based on the ADB’s extensive experience in other countries and access to global knowledge and advanced technologies.

The ADB provided its first loan in the Philippines in 1969 to support private-enterprise development, followed by a loan to support agriculture and rural development in Mindanao.

Since then, it has provided $15.9 billion or P747.3 billion in sovereign loans, $1 billion or P47 billion in non-sovereign operations (loans, equity investment, and guarantees to the private sector), and $93 million or P4.4 billion in technical assistance.

The ADB said in the aftermath of Supertyphoon Yolanda in November 2013, it provided $900 million or P42.3 billion for typhoon-affected areas.