Category : Press Release
Date : January 16, 2018
Agency : Department of Finance
Title : $105-M ADB-assisted projects under way to improve rollout of infra projects
Article :
The Asian Development Bank (ADB) has extended a technical aid loan of $100 million and another $5 million in grants to the Philippines to help improve and speed up the roll out of major infrastructure projects on the Duterte watch, according to the Department of Finance (DOF).

Under the $5-million aid, the Department of Transportation (DOTr) has proposed that preparation activities for the Tagum-Davao-Digos segment of the Mindanao Rail Project be covered by the ADB grant while the National Economic and Development Authority (NEDA) aims to tap it to help prepare for its recently approved Project Facilitation, Monitoring and Innovation (PFMI) Task Force.

For the $100 million loan, the Philippine government will provide a counterpart fund of $60 million to set up an Infrastructure Preparation and Innovation Facility (IPIF) that will support initiatives of the DOTr and the Department of Public Works and Highways (DPWH)—the two state agencies that will carry out the government’s flagship infra projects---in conducting pre-investment activities.

The Philippines will be hosting in May the 51st Annual Meeting of the ADB Board of Governors, which is chaired this year by Finance Secretary Carlos Dominguez III. The meeting’s 2018 theme is “Linking People and Economies for Inclusive Development.”

The IPIF will include support for feasibility studies, detailed engineering design, preparation of bid documents, due diligence review and other activities that will improve the preparedness of the DOTr and DPWH in implementing public infrastructure projects.

According to the DOF, the NEDA Board chaired by President Duterte approved the IPIF on Sept. 12, 2017 based on the recommendation by the Investment Coordination Committee-Cabinet Committee (ICC-CabCom) chaired by Dominguez.

The IPIF was among the six new big-ticket projects that had been approved by the ICC-CabCom last year.

Besides the $105 million in technical assistance from the ADB, the government can also tap about $3.68 billion in loans and another $23.1 million in the form of non-lending programs from the Bank to help fund its accelerated spending programs on infrastructure and social services under the Duterte administration from 2018-2020.

Last year, the regional development arm of the United Nations for the Asia-Pacific region has found the Philippines as the “most ready” among the 10 member-states of the Association of Southeast Asian Nations (ASEAN) in carrying out a massive infrastructure buildup owing to several positive factors buttressing the economy.

DOF Undersecretary and Chief Economist Gil Beltran said these positive factors cited by the UN Economic and Social Commission for Asia and the Pacific (UNESCAP) include substantial financing opportunities from the Philippines’ development partners, the government’s tax reform program and rising revenue collections, and the declining debt service ratio, which all contribute to an adequate fiscal space that would allow the country to pursue an expansionary policy on the Duterte watch.

The UNESCAP, the largest UN body serving the Asia-Pacific, recently convened in Manila its Workshop on Infrastructure Financing Strategies to discuss the Philippines’ infrastructure needs and different financing modes and sources available to the country.

Beltran, who represented the DOF in that dialogue held at the Shangrila Hotel in Makati City, said that besides its ample fiscal space, the workshop also cited the country’s strong financial system, which is teeming with excess liquidity, and supported by a good supervision and a rising savings rate.

Beltran said UNESCAP also cited the government’s “strong project evaluation and prioritization system based on economic viability” in undertaking infra projects, and a Right-of-Way Law or Republic Act 10752, which encourages the government and landowners to agree promptly on land transactions for infrastructure projects.

Another favorable factor cited by UNESCAP “is the country’s Public-Private Partnership (PPP) law that sets up an institution and a set of rules to implement projects in an orderly manner and a private sector that is aggressive in participating,” Beltran said.