The Philippines has signed an agreement with the Asian Infrastructure Development Bank (AIIB) committing the multilateral lender to extend a loan of up to US$750 million to support government efforts to suppress the coronavirus disease 2019 (COVID-19) outbreak and augment the funds needed to address this health crisis.
This loan accord cements AIIB’s commitment to co-finance with the Asian Development Bank (ADB) the Philippines’ COVID-19 Active Response and Expenditure Support (CARES) program, a quick-disbursing budget support facility designed to fund the government’s efforts to combat COVID-19 and mitigate the adverse impact of the contagion on the economy.
Finance Secretary Carlos Dominguez III and AIIB Acting Director General Rajat Misra signed the loan agreement last Friday (June 5).
“The loan package from the AIIB will help augment our funding requirements necessary to mitigate the severe negative impact of COVID-19 on our people and our economy. On behalf of the Philippine government, we thank the AIIB and President Jin Liqun for committing with the ADB to support the CARES program, which will go a long way in helping our people get back on their feet, and our economy recover and emerge stronger after the crisis,” Secretary Dominguez said.
With the approval of the loan last May 28, AIIB Vice President DJ Pandian has said: “The focus of our efforts is to help the government tackle the immediate health and economic challenges posed by the pandemic. AIIB’s support will contribute to building economic resilience and ensuring quick recovery.”
The Department of Finance (DOF) expects the full disbursement of the US$750 million AIIB loan within June.
The AIIB loan carries a maturity period of 12 years inclusive of a 3-year grace period.
Secretary Dominguez signed an agreement last month with ADB Country Director for the Philippines Kelly Bird that would enable the government to access up to US$1.5 billion in budgetary support from the Bank to augment funds for the CARES program.
This ADB loan for the CARES program is under the Bank’s Countercyclical Support Facility Pandemic Response Option (CPRO).
According to the AIIB, its budgetary support for the CARES program is part of its coordinated international effort to counter the COVID-19 pandemic.
Under its COVID-19 Crisis Recovery Facility, the AIIB has committed an initial US$5 billion to US$10 billion “to support AIIB members’ urgent economic, financial, and public health needs and quick recovery from the crisis.”
The AIIB’s co-financing for the CARES program is the second loan it has extended to the Philippines.
In 2017, the AIIB approved a US$207.6-million loan for the US$500-million Metro Manila Flood Control Management Project, which it co-financed with the World Bank.
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