WB boosts funds for PH; gov’t eyes vital projects

The World Bank has approved a bigger lending budget for the Philippines in the three years to 2015.

National Treasurer Rosalia de Leon said the World Bank recently agreed to set aside up to $4.5 billion for its country assistance program for the Philippines.

The latest lending program is bigger than the $2.1 billion to $3 billion that the World Bank set aside for 2010 to 2012.

“In terms of financing, we do not envision any liquidity crunch… We continue to enjoy access to concessional loans from our development partners,” De Leon said.

Recently, the Philippines and other emerging markets suffered from flight of foreign capital as foreign portfolio investors either liquefied their assets or shifted to the US dollar.

The capital flight was said to be caused by the perceived improvement in the US economy which, in turn, prompted the US Federal Reserve to announce an end to its policy of easy money.

De Leon said that, given the Philippines’ favorable fiscal position, the country will not have difficulty sourcing funds particularly in times of financial volatility.

She also noted that the Philippine government’s outstanding debt fell to only 40 percent of the country’s gross domestic product in 2012. This was the first time since the Asian financial crisis that the debt-to-GDP ratio dropped to below 50 percent.

Earlier, the World Bank announced that it would support more of the country’s development programs and projects.

The multilateral finance institution believes that, although the Philippines has sustained robust growth, several projects and programs need to be put in place so that the economic benefits may translate into actual poverty reduction.

As of June 2012, the country’s poverty incidence stood at 27.9 percent, still one of the highest among emerging markets in Asia.