The Asian Development Bank (ADB) on Tuesday (May 26) approved a $400-million loan to further develop the Philippines’ capital markets.
In a statement, the Manila-based multilateral lender said the Support to Capital Market-Generated Infrastructure Financing Program-Subprogram 1 was aimed at addressing “key constraints that have limited the growth of domestic capital markets, especially government and corporate bond markets.”
“It also focuses on building a vibrant domestic institutional investor base that will become a sustainable source of long-tenor infrastructure finance,” the ADB said.
“By boosting infrastructure finance, the capital market development program will support higher public infrastructure spending for years to come,” the ADB added.
“Resilient and vibrant capital markets are key to achieving economic development, growth, and poverty reduction,” said ADB vice president Ahmed M. Saeed.
“By developing domestic capital markets, funds are generated to support higher levels of long-term investments and sustainable quality job creation,” Saed said.
“The program approved today will support the Philippine government’s development goals, including its response to the COVID-19 pandemic,” he added.
According to the ADB, “the capital markets development program has supported various reforms in recent years, including the launch and implementation of the first government-led, comprehensive domestic bond market development plan.”
“The Philippines also has modernized its government debt trading infrastructure and provided a reliable yield curve to support the pricing of private sector debt instruments,” according to the ADB.
So far this year, the ADB extended to the Philippines a total of $2.1 billion in loans, including $1.7 billion for two loans for COVID-19 response.