Economic Planning Secretary Arsenio Balisacan: Inclined to take offer. INQUIRER FILE PHOTO
MANILA, Philippines—The government is considering to take the $1 billion in total loans being offered by the Asian Development Bank and the World Bank to finance the massive rehabilitation and reconstruction requirement following the devastation caused by Supertyphoon “Yolanda.”
Economic Planning Secretary Arsenio Balisacan said the government wanted to take advantage of the available cheap financing being offered to the Philippines to help the affected regions recuperate.
“We would like to take advantage of the soft loans being offered to us to quickly pursue rehabilitation and reconstruction,” Balisacan told reporters Friday at the sidelines of the annual meeting of the Philippine Economic Society.
Balisacan, who is also the director general of the National Economic and Development Authority, said this meant that the government could borrow the entire amounts being offered as loans by two of the world’s biggest multilateral institutions.
However, he said this would also depend on the post-Yolanda rehabilitation and reconstruction plan, which will determine exactly how much would be needed to rebuild the devastated areas.
“The government is keen on taking the soft loans being offered … although we need to first come up with the rehabilitation and reconstruction plan to determine the cost of damage and infrastructure loss,” Balisacan said.
The ADB last week announced that it had made available $500 million in loanable funds for the Philippines to help rebuild the devastated areas.
The amount was on top of the $23 million in grant the ADB said it was extending to the country.
Similarly, according to Balisacan, the World Bank has also offered $500 million worth of loans for the Philippines.
The World Bank has so far not issued a press statement on the loan offer, but Balisacan said this was made known to government economic officials last Friday.
The ADB and the World Bank are two of the country’s biggest sources of official development assistance (ODA), or highly concessional loans (low interest and long maturity period).
Balisacan said the loans being offered by the two creditors had interest rates lower than the London interbank offered rate (Libor), which is well below 1 percent, and maturities of between 20 and 30 years.
He said the government might consider borrowing more from multilateral institutions and less from the international capital market to take advantage of the available cheap financing that has become even more accessible following the calamity.