The Philippines will borrow $300 million from the World Bank to embark on a digital transformation program, bringing the total amount of loans to be sought under President Marcos to $2.14 billion to date.
The latest World Bank documents showed that the proposed Philippines first digital transformation development policy financing is aimed toward catalyzing “private investment for an inclusive economic recovery through digital transformation.”
Finance Secretary Benjamin Diokno wanted to, among others, shore up government revenues by improving tax administration through digitalization in order to bring the budget deficit back to prepandemic levels equivalent to about 3 percent of gross domestic product by 2028.
The President and his chief economic manager had been cold to new or higher taxes, as proposed by former President Duterte’s economic team, to repay debts incurred during the ongoing pandemic and narrow the record deficit wrought by large public spending to fight COVID-19.
This newest addition to the World Bank’s loan pipeline for the Philippines was expected to be approved in fiscal year 2024, which starts in July of next year.
In all, 12 projects worth a combined $2.14 billion in low-interest, concessional loans will be up for consideration of the lender’s Washington-based board of executive directors during the Marcos Jr. administration.
Documents last May showed the World Bank will lend the Philippines in December of this year $200 million for the second financial sector reform development policy financing aimed at “achieving a resilient, inclusive and sustainable financial sector.”
“The financial system, while smaller than the financial systems of Asian peers, has broadly withstood the impact of COVID-19, but it faces downside risks due to high interconnectedness with non-financial corporates and volatile external conditions,” the World Bank said.