The China-led Asian Infrastructure Investment Bank (AIIB) on Thursday (May 28) approved a second loan to the Philippines, worth $750 million, for COVID-19 response.
Finance Undersecretary Mark Dennis Y.C. Joven told the Inquirer that the Beijing-based lender approved on Thursday night the fresh financing to be used in fighting COVID-19.
As earlier reported by the Inquirer, the AIIB will co-finance the Manila-based lender Asian Development Bank’s (ADB) COVID-19 active response and expenditure support (Cares) program.
In April, the ADB approved $1.5 billon for the Philippines’ $2.25-billion Cares program.
Prior to this COVID-19-related loan, the Philippines had only availed itself of one loan from the AIIB —$500-million worth in 2017 for the Metro Manila Flood Management Project, which was co-financed by the Washington-based World Bank.
According to documents, the Cares program was expected to result in the following:
- Increase in coronavirus testing capacity to 8,000 a day in May
- Reduced turnaround time for test results to 48 hours or less by July
- Coverage by the Philippine Health Insurance Corp. (PhilHealth) of all COVID-19 patients, health care workers by July
The Cares program would also:
- Provide funding for conditional cash transfers and emergency cash subsidies to 4.4 vulnerable households by July
- Fund emergency subsidy for 13.6 million households by July
- Fund $600 million worth of economic stimulus programs for businesses, including those in the agriculture sector, by December
- Fund wage subsidies for at least 1 million MSMEs also by December
- Absorb revenue loss from tax relief for 1 million MSMEs by December
Results expected from the Cares program included:
- Reduction in infection rate from every three to four days to every 30 days or more by December
- Reduction of poverty rate to less than 18 percent by April 2022 from 20.7 percent projected last April
As of mid-May, the Philippine government had borrowed from foreign lenders and secured grants worth a total of nearly $5 billion for COVID-19 response.