AIIB to provide US$750 million loan for COVID-19 response
MANILA – Another agreement was signed between the Philippines and the Asian Infrastructure Investment Bank (AIIB) where the China-led multilateral lender would extend a loan to the Philippines of up to US$750 million to support efforts to suppress the coronavirus disease (COVID-19) outbreak and augment the funds needed to address the prevailing health crisis.
The agreement strengthens 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 vs COVID-19 and mitigate the adverse impact of the contagion on the economy.
Finance Secretary Carlos G. Dominguez III and AIIB Acting Director General Rajat Misra signed the loan agreement last week.
Secretary Dominguez was quoted saying the loan package from AIIF will complement the government’s funding requirements needed to mitigate the severe negative impact of COVID-19.
“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.
The loan was approved last May 28 and AIIB Vice President DJ Pandian said the focus of their bank is to help the Philippine government address the immediate health and economic challenges posed by the pandemic.
“AIIB’s support will contribute to building economic resilience and ensuring quick recovery,” he said.
The Department of Finance (DOF) hopes the full disbursement of the US$750 million AIIB loan within the month of June. The loan carries a maturity period of 12 years inclusive of a 3-year grace period.
Earlier, Secretary Dominguez signed an agreement with ADD Country Director for the Philippines Kelly Bird that would allow the government to access up to US%1.5 billion in budgetary support from the Bank to complement funds for the CARES program.
The AIIB said its budgetary support for the CARES program is part of its coordinated international effort to counter the COVID-19 pandemic.
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. (Melo M. Acuña)
Finance Secretary Carlos G. Dominguez III. (File Photo/Melo M. Acuna)