What is ADB and how does it assist the Philippines?
ADB is an international development finance institution whose mission is to assist its developing member countries reduce poverty and improve the quality of life of their people.
Headquartered in Manila, and established in 1966, ADB is owned and financed by its 67 members, of which 48 are from the region and 19 are from other parts of the globe.
Uniquely, the Philippines is not only the Asian Development Bank's (ADB's) founding member and 11th largest shareholder, but also its host country. It is the fifth largest borrower, accounting for about 8% of total sovereign and nonsovereign lending. It is also one of the largest clients for private sector lending and equity investments, and is a supplier, winning bids under ADB loans and technical assistance (TA) projects.
Who are ADB's clients in the Philippines?
ADB's development partnership includes a wide range of stakeholders representing Government, civil society, donor institutions, the business community, and research and academic institutions.
ADB primarily provides resources to the Government of the Philippines (GOP) to support its development projects. The Department of Finance (DOF) is ADB's main counterpart. The different line departments, Government Owned and Controlled Corporations (GOCCs), and Government Financial Institutions (GFIs) execute or implement the projects across various sectors. Oversight agencies, particularly the DOF, National Economic and Development Authority, and Department of Budget and Management help ensure smooth identification implementation of the projects.
How can non-government organizations (NGOs) and the private sector be involved in ADB projects in the Philippines?
NGOs in the Philippines, for instance, are now involved in implementing projects under the Japan Fund for Poverty Reduction, which provides resources to innovative pilot projects designed to reduce poverty.
Can local government units (LGUs) receive direct assistance from ADB?
ADB provides resources directly to National Government Agencies (NGAs), Government Owned and Controlled Corporations (GOCCs), and Government Financial Institutions (GFIs), since these are supported by sovereign guarantee from the Government of the Philippines.
LGUs, can, however, benefit from ADB through NGAs or fund conduits such as GFIs and the Municipal Development Fund (MDF). Many LGUs are beneficiaries of ADB's ongoing projects for LGUs being implemented by the Government and the various fund conduits. Potential LGUs may access these funds by coordinating directly with the implementing agencies.
What are the types of assistance that ADB offers?
ADB provides assistance to the Government of the Philippines in the form of loans, and technical assistance that are usually grants. Loans support development projects in sectors and areas agreed upon by both ADB and the Government. Besides project loans, ADB also provides program and sector loans, which support policy, sector, and institutional reforms.
ADB extends technical assistance (TA) in three forms:
- Project Preparatory TA (PPTA) which helps in project preparation and detailed engineering
- Advisory TA (ADTA) which aids in institutional strengthening, sector and policy studies, and non-project-related human resource development
- Regional TA (RETA) which assists development activities covering many countries in the region/sub-region.
ADB also administers, on behalf of the Government of Japan, the Japan Fund for Poverty Reduction, which provides resources to innovative pilot projects designed to reduce poverty.
What are the levels of lending and grants that ADB provides to the Philippines annually?
ADB provides around $600 million in assistance to the Philippines annually.
The country partnership strategy, 2011 to 2016, for the Philippines targets governance reforms and measures to drive broad-based growth and poverty reduction efforts. The program amounts to $3.8 billion for the six-year period. The new strategy is fully aligned with government priorities, focusing on strengthening the investment environment to attract more private funding for infrastructure development and job creation.
The country operations business plan, 2014-2016, for the Philippines is consistent with the country partnership strategy and further operationalizes the program's strategic focus on inclusive growth, drawing on ADB's Strategy 2020, government priorities, and lessons from the program's implementation.
What are the terms and conditions of ADB loans?
ADB offers its public and private sector borrowers LIBOR-based loan (LBL) carrying a floating lending rate that consists of a six-month LIBOR and a spread fixed over the life of the loan. ADB's lending rate for Government loans is LIBOR+0.60 ADB spread, usually with a repayment period of 20 years including a grace period of 4-5 years. ADB also charges a front-end fee of 1% and annual commitment fee of 0.75% computed on the scheduled undisbursed portion of the loan.
View today's indicative lending rates.