The Philippines is poised to secure by May its second loan from the Asian Infrastructure Investment Bank (AIIB), this time, to co-finance with the Asian Development Bank (ADB) the COVID-19 active response and expenditure support (CARES) program.
Documents showed that the Philippines’ CARES program would cost a total of $2.25 billion, of which $1.5 billion would be covered by a recently approved loan from the ADB.
The remaining $750 million will be financed with a loan from the Beijing-based AIIB, which is up for approval next month.
Since the Philippines became a founding AIIB member in 2015, it had availed itself of only one loan—the $500-million loan approved in 2017 for the Metro Manila flood management project, which was cofinanced with the Washington-based World Bank.
Given that the AIIB was relatively new, its lending rates were higher than those of the ADB and the World Bank.
According to documents, the CARES program was expected to result in the following: increase in COVID-19 testing capacity to 8,000 a day by May, shortening to 48 hours or less of the average turnaround time of testing from sample collection to results by July, and the coverage of all COVID-19 patients and health care workers in Philippine Health Insurance Corp. in-patient and primary care COVID-19-related benefits by July.
Also, the CARES program will provide conditional cash transfers and emergency subsidy support to 4.4 million vulnerable households by July; emergency subsidy support to 13.6 million households also by July; $600 million worth of economic stimulus and support to highly affected and vulnerable sectors, including agriculture, by December; wage subsidies to at least one million micro, small and medium-sized enterprises (MSMEs) also by December; and tax relief for at least a million MSMEs by December.
Among the expected results from the CARES program are the reduction in the doubling rate of confirmed COVID-19 cases to 30 days or more by December, from a baseline of every three to four days as of April 4; and reducing poverty incidence rate to less than 18 percent by April 2022 from the 20.7 percent projected this month. INQ