PH gets $300-M ADB loan for LGU development, poverty reduction

The Asian Development Bank (ADB) has approved a $300-million policy-based loan to support the Philippines’ efforts to help local government units deliver high-quality and accountable services, boost economic development and reduce poverty.

In a statement, the Manila-based multilateral lender said the loan under its Local Governance Reform Program would help empower and equip LGUs to meet the needs of citizens and ensure they would deliver services aligned with local preferences, improve their capacity to raise their own revenues and lower the cost of doing business for the private sector.

The program is in line with the government’s plan to expand the role of LGUs as catalysts of local economic development, as outlined in the Philippine Development Plan 2017-2022.

“ADB supports the Philippine government’s goal of creating a high-trust society, where citizens have confidence in the capacity of local government institutions to deliver services to communities and provide a simpler business environment for private enterprises,” said ADB’s Southeast Asia director for public management, financial sector and trade Jose Antonio Tan III.

“A healthy business environment will lead to more jobs and strengthen the local economy,” he added.

The Philippines is a relatively decentralized nation compared with its neighbors in Southeast Asia, and ADB has partnered with the government since 2006 on a program of major reforms to ensure this decentralization results in inclusive growth, quality service delivery and better economic opportunities for a rapidly growing population.

As part of more recent efforts to empower LGUs, the government has embarked on reforms to strengthen the legal framework for local service delivery to clarify roles and responsibilities, distribute shared taxes more fairly and improve the ability of local governments to partner and coordinate on delivering key services.

“[This] ADB program is helping the government provide LGUs with the tools and skills necessary to deliver high-quality public services in an accountable and cost-effective manner,” ADB public management specialist for Southeast Asia Robert Boothe said.