PH, ADB in talks for $400-500M vaccine procurement financing
MANILA, Philippines — The Asian Development Bank (ADB) will lend to its host-country the Philippines at least $9.4 billion — possibly including about $400-500 million for COVID-19 vaccine procurement — in the next three years so the economy can bounce back from what seemed to be a slow recovery from the pandemic-induced recession so far.
ADB vice president Ahmed M. Saeed said in a statement Wednesday, about two-thirds of the Manila-based multilateral lender’s Country Operations Business Plan 2021–2023 for the Philippines will support financing for infrastructure development, health care, and jobs recovery.
Oscar Amiel A. Badiola, senior programs officer at the ADB’s Philippines country office, told a press briefing Wednesday that the lender extended to the Philippines a record-high $4.2 billion across 11 loans, of which the bulk had been geared towards immediate COVID-19 response.
For 2021, the ADB plans to lend the Philippines a total of $3.57 billion across seven programs and projects, plus $800-million worth in five projects still on standby.
Among the loans up for ADB approval next year were the $1.75-billion South Commuter Railway Project, Tranche 1; $500-million Building Up Implementation and Local Level Drivers for Universal Health Care; $400-million Facilitating Youth School-to-Work Transition, Subprogram 3; $400-million Local Governance Reform Program, Subprogram 2; $238-million Davao Public Transport Modernization Project; $180-million Metro Manila Bridges Project; and $100-million Sustainable Tourism Development Project.
The projects on standby for possible ADB financing next year included the $400-million Integrated Flood Risk Management Sector Project, Phase 1, and $100 million in loans each for the following: Baguio City Sanitation Improvement Project; Integrating Innovation System in Philippine Technical and Vocational Education and Training; Mindanao Agro-Enterprise Development Project; and Mindanao Irrigation Development Project, Phase 1.
Also, country director for the Philippines Kelly Bird said the ADB and the Philippine government were currently in talks to tap the new $9-billion Asia-Pacific Vaccine Access Facility (APVAX), under which member-countries can borrow $400-500 million for their COVID-19 vaccine procurement and rollout, next year.
In case their discussions with the Philippines prosper, Bird said the APVAX financing will be over and above the ADB’s 2021 lending pipeline. “We are committed to supporting the Philippines in financing COVID-19 vaccines,” he said.
Bird said the availability of vaccines will be a “big game-changer” to the economic outlook as inoculation would accelerate the resumption of business and consumer confidence upon containing the deadly coronavirus.
The ADB projected a record 8.5-percent contraction in the Philippines’ gross domestic product (GDP) this year before a rebound of 6.5-percent growth next year.
For 2022, the ADB’s pipeline of loans for the Philippines amounted to at least $2.92 billion, on top of a slightly bigger $2.95 billion in 2023.
Bird noted that while there were “promising” green shoots being observed in recent manufacturing, goods exports, consumer spending, and cash remittances data, the recovery thus far had been “slow and fragile.”
The longest and most stringent COVID-19 lockdown in the region not only pushed the economy into a recession but also would inflict a severe impact on the labor market and reverse gains in poverty reduction, Bird said.
The ADB expects the unemployment rate to remain elevated at 8-9 percent during the first half of next year, Bird said, as the bigger share of new jobs were expected to be “lower quality” employment in the informal sector.
As such, the poverty incidence rate may rise to 20.7 percent this year from a low of 16.7 percent in 2018, Bird added.
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