AIIB Okays $300-M loan for PH COVID-19 vaccination program

The Philippines now has $1.2 billion (over P58 billion) in loans which three multilateral lenders can directly pay to vaccine suppliers with the approval on Thursday of the $300-million financing from the Asian Infrastructure Investment Bank (AIIB).

Finance Undersecretary Mark Dennis Joven confirmed to the Inquirer that the Beijing-based multilateral lender’s board had approved its share in the financing for the Philippines’ $764.17-million second health system enhancement to address and limit COVID-19 (Heal 2) project, which will be implemented by the Department of Health (DOH).

The Manila-based Asian Development Bank (ADB) approved its $400-million loan for Heal 2 last March 11, while the balance of $64.17 million will be shelled out by the national government.

Joven said the loan signing for the AIIB financing was slated for this month. It will also take effect this month.

As such, these new loans can be disbursed as early as this month by three multilateral lenders to directly pay suppliers of COVID-19 vaccines that the Philippines will purchase.

To recall, the World Bank also approved last March 11 the $500-million additional financing for the Philippines’ COVID-19 emergency response project.

The Department of Finance signed the loan agreements with the ADB and the World Bank on March 19, Joven told the Inquirer last Tuesday.

The requirements to make these loans effective will also be met before this month ends, such that “money can be drawn before the end of the month to pay for vaccines,” Joven had said.

Joven disclosed that the World Bank loan would cover vaccines ordered from Moderna Inc., while earlier ADB documents showed it would finance those coming from Novavax Inc.

According to the ADB, 93.51 percent of Heal 2’s project cost amounting to $714.57 million will be spent to “efficiently and effectively” deliver COVID-19 vaccines nationwide; $37.5 million will cover contingencies; while the remaining $12.1 million had been set aside for financing charges during implementation.

Since the AIIB loan will be partially administered by the ADB, it will have the same borrowing terms: 10-year maturity plus up to three-year grace period, and an interest rate at a spread of 50 basis points over London inter-bank offerered rate.