PH Gov’t, ADB sign $300-m Capital Market Loan to back ‘Build, Build, Build’ Project

Secretary Carlos Dominguez of the Department of Finance(DOF) and President Takehiko Nakao of Asian Development Bank (ADB) penned the $300-million capital market loan to enhance the liquidity in the market and to back the infrastructure project of the government.

Photo source adb.org

“The Encouraging Investment through Capital Market Reforms Program (Subprogram 2) will help to increase the amount of long-term finance, both public and private, needed to fund the government’s infrastructure projects.” ADB President Nakao explained at the ADB Headquarters, Manila on January 10.

Capital Market Reforms Program (Subprogram 2) is an approved loan and technical assistance of the ADB to the Philippines for the inclusive economic growth and it will make a framework for ADB's support toward increasing financial inclusion with a focus on improving poor households' access to finance, financial literacy, and consumer protection.

Both parties also signed the $380-million loan for the infrastructure project of the government called “The Improving Growth Corridors in Mindanao Road Sector Project” which can help the economic progress of the Philippines.

“Addressing Mindanao’s road connectivity constraints will help to unlock its potential as a major contributor to the Philippines’ overall growth. The project is ADB’s first support for a regional project under the government’s flagship “Build Build Build” infrastructure development program,” Nakao added insisting the ADB’s commitment to the country’s groundwork projects.

Meanwhile, DOF Secretary Dominguez recognized the ADB’s effort to help the county’s primary economic booster project which is the ‘Build, Build, Build’ Project and will open new growth corridors in the second largest island of the Philippines, the Mindanao.

ADB is vocal to their goal in the Asian Region which is the improvement of infrastructures in Asia through private-sector funding. According to ADB Chief Economist Yasuyuki Sawada, the Bank has been implementing a plan to increase loan and grants approval up to 50% between 2014 and 2020.

“Many Asian economies have been working to nurture a regional bond market so they can build infrastructure through private-sector projects and issue bonds to privately finance them. We must work harder to create regulations and bond-rating systems to expand Asia's stock and other capital markets,” Yasuyuki said in an interview, encouraging the national governments of Asian Region.

According to Bangko Sental ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo, capital market reform project may affect the bond market and promote the Asian capital market integration.

Nakao cleared that the ADB will continue to support the financial reforms sector of the Philippines which was one of the Founding Members of the Bank in 1966.

The two loan grants of the ADB are aligned to the Philippine Development Plan 2017-2022.

“Last year’s $1.08-billion assistance reflects ADB’s commitment to scaling up our support to the Philippines and its development agenda,” ADB chief added.

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