$4B in additional loans for COVID-19 response underway

At least a dozen more loans worth a total of $4.02 billion (over P195 billion) will be secured by the Philippines this year and in 2021 to finance response to and recovery from the health and socioeconomic crises inflicted by the COVID-19 pandemic.

Citing a report from the Department of Finance’s (DOF) international finance group, 2021 budget documents showed that in the pipeline of program loans from the Manila-based Asian Development Bank (ADB) were the $500-million disaster resi­lience improvement program; $400-million build universal health-care program; $300-million local governance reform sector development program (subprogram 2), and the $300-million facilitating youth school-to-work transition program (subprogram 3).

The ADB’s disaster resilience improvement program will be a standby facility which will only become available and can be disbursed once an agreed drawdown trigger is met.

The three other upcoming ADB loans will be available in 2021.

In the Washington-based World Bank’s lending pipeline for the Philippines were the following: $600-million promoting competitiveness and enhancing resilience to natural disaster subprogram 2 development policy loan, $580-million emergency social protection program, $70-million teacher effectiveness and competencies enhancement project and $400-million financial sector development policy loan.

The Asian Infrastructure Investment Bank will cofinance the World Bank’s emergency social protection program to be implemented by the Department of Social Welfare and Development, with a $250-million counterpart financing expected to be approved by the Beijing-based lender this year.

Bilateral partners such as Japan and France will also extend three loans to the Philippines. The Japan International Cooperation Agency’s $458.99-million postdisaster standby loan (phase 2) will be tapped in 2020.

Agence Française de Développement, meanwhile, will lend $55.14 million for the local government development program (subprogram 1) and another $110.28 million for the support to capital market generated infrastructure financing (subprogram 1), both of which are scheduled for availment next year.

Including those earlier secured by the Philippines, program loans availment for 2020 will amount to $9.15 billion or P465.25 billion, a jump from only $1.49 billion or P75.92 billion last year.

In 2021, program loans from multilateral lenders and bilateral partners will amount to $1.83 billion or P92.81 billion.