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AIIB, ADB co-finance $750-M loan to PH

By Chino S. Leyco

Beijing-led Asian Infrastructure Investment Bank (AIIB) and the Asian Development Bank (ADB) approved a loan to the Philippines to support the national movement’s emergency spending amid coronavirus pandemic.

Under the two-banks co-financing arrangement, both AIIB and ADB committed their $750-million loan to help the Duterte administration in staving off the worst twin public health and economic crises now wreaking havoc in the country.

“The budgetary support will go toward increasing the government’s testing capacity, bolstering vulnerable sectors (including agriculture) and providing conditional cash transfers and emergency assistance to poor households,” AIIB said in a statement.

Under the government’s wage subsidy program, the four-year-old multilateral financial institution also said that they expect at least one million micro, small and medium-sized enterprises (MSMEs), of which 58 percent are registered to women, will benefit from the initiative.

The Philippines is one of the first developing countries globally and the first in Southeast Asia to have introduced strict quarantine measures to limit the spread of the disease.

The lockdown measures are expected to take a heavy toll on the country’s economic growth with the International Monetary Fund (IMF) estimating that gross domestic product (GDP) could see a sharp contraction from 6.2 percent to 0.6 percent for 2020.

“The focus of our efforts is to help the government tackle the immediate health and economic challenges posed by the pandemic. AIIB’s support will contribute to building economic resilience and ensuring quick recovery,” D.J. Pandian, AIIB vice president said.

While AIIB does not have a regular instrument for policy-based financing, the bank said it is extending such financings on an exceptional basis under the COVID-19 Crisis Recovery Facility to support its members through projects co-financed with the World Bank or ADB.

AIIB has set aside an initial $5 billion to $10 billion for its COVID-19 Crisis Recovery Facility to support its member nations’ urgent economic, financial, and public health needs and quick recovery from the crisis.
AIIB said it is currently reviewing projects from its members.


Source: Manila Bulletin (https://business.mb.com.ph/2020/05/29/aiib-adb-co-finance-750-m-loan-to-ph/)

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