THE Asian Development Bank (ADB) has extended $600 million worth of loans to the national government to support its massive infrastructure-buildup program under the public-private partnership (PPP) initiative.
The amount covers two $300-million-worth loans that seek to expand the private participation in infrastructure investment through the promotion of PPPs and support long-term finance projects in the Philippines.
ADB said the loans represent the initial release of a two-tranche drawdown from the facility.
“PPPs are vital for infrastructure development and for a sustainable economy. While there has been significant progress on PPPs, further reforms are needed to increase private investment,” said Juan Luis Gomez, Principal Public Management specialist at ADB’s Southeast Asia Department.
“These loans will help the government pursue policy reforms clearing obstacles to PPPs and increasing long-term private sector finance for them,” he added.
The PPP-oriented loan will support improved systems to assess and budget for right-of-way acquisition and resettlement of communities.
It will boost capacity and staff at the national PPP Center and help to finalize work on proposed amendments to the build-operate-transfer law which are critical for sustaining the PPP Program.
The second loan will support reforms to the government bond market that will increase trading volumes and contribute to the development of a yield curve which can support pricing of corporate, project and infrastructure related debt.
The Manila-based multilateral development bank said revisions to the Insurance Code will increase the sector’s appetite for long-tenor investments, like infrastructure bonds, while parallel reforms will provide incentives to increase the country’s pool of long-term savings.