Member Fact Sheet, April 2022

ADB's Work in the Philippines   Download Fact Sheet

ADB is assisting the Government of the Philippines in its immediate coronavirus disease (COVID-19) response measures, particularly in the health sector and structural reforms including labor and employment programs to aid post-pandemic recovery and overall economic resilience.

In 2021, more than half of ADB’s $2.2 billion total loan commitments to the Philippines focused on boosting the country’s health care service delivery amid the COVID-19 pandemic. This included $650 million in loans for two projects focusing on health system enhancement (HEAL2) and its additional financing. These helped the government procure life-saving COVID-19 vaccines for its national vaccination program. The COVID-19 vaccines purchased by the government using the HEAL2 loan comprised about half of the country’s total vaccine procurement in 2021. ADB also extended a $600 million policy-based loan to help the Philippines provide quality and equitable health services.

To date, ADB has committed 612 public sector loans, grants, and technical assistance totaling $27.4 billion to the Philippines. Cumulative loan and grant disbursements to the Philippines amount to $22.01 billion. These were financed by regular and concessional ordinary capital resources, and other special funds. ADB’s ongoing sovereign portfolio in the Philippines includes 28 loans worth $8.33 billion.

In addition to its health-related support, ADB provided a $400 million policy-based loan to help the Philippines expand its youth employment and skills programs to assist young Filipinos find quality jobs and create a wider employment base for post-pandemic economic growth for the country.

On infrastructure, ADB committed a $175 million loan to help the government build three new climate- and disasterresilient bridges over the Marikina River to improve road traffic flow amid the rapid urbanization of Metro Manila. Construction work on the Malolos–Clark Railway Project, part of the government’s flagship North–South Commuter Railway Project, also began in 2021. In addition, ADB is financing, through the Infrastructure Preparation and Innovation Facility, two large consulting services contracts signed by the government in 2021 for the detailed engineering design of a road network project and the Metro Rail Transit-4 project, which will link Manila to the eastern Rizal province. These projects are part of the government’s flagship “Build, Build, Build” (BBB) infrastructure development program.

To help improve local governments’ capacity to provide high-quality public services especially during the pandemic, ADB provided a $400 million policy-based loan to help strengthen local government units’ service delivery framework and modernize local public financial management.

Ortigas Center is a financial and central business district located at the boundaries of Pasig, Mandaluyong, and Quezon City in the Philippines. Photo: ADB

Nonsovereign operations. Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in the Philippines as of 31 December 2021 was $115.84 million representing 0.82% of ADB’s total private sector portfolio.

Operational challenges. The COVID-19 pandemic and lockdowns have caused temporary delays in the government’s BBB program. Despite this, ADB remains committed to support the Philippines in achieving its goal to increase public infrastructure spending to at least 5% of its gross domestic product (GDP) for 2021 and 2022, from 4.8% of GDP in 2020 and an average of less than 3% of GDP in past decades.

Government agencies’ capacity to roll out large and complex infrastructure plans will need to be further strengthened. ADB is supporting the government in this area through loans, grants, and technical assistance. The bank is working closely with the government to enhance the technical and institutional capacities of national and local agencies and staff; improve interagency coordination; and strengthen partnerships among the government, private sector, and development partners.

Knowledge Work

ADB extended technical assistance to the National Economic and Development Authority (NEDA) for policy advisory and knowledge support. It is also helping NEDA assess its organizational structure and develop a strategy for change management and reengineering internal business processes. ADB is supporting a study on the optimal institutional and governance structure for the entire bureaucracy of the country. Another technical assistance will help the Department of Finance develop the Philippines’ long-term economic growth strategy to guide structural reforms toward more inclusive growth and steer the country to a high-income status.

ADB assisted the Department of Labor and Employment (DOLE) and the Department of Trade and Industry (DTI) in conducting consultations with government agencies and business and labor groups to develop recommendations for the National Employment Recovery Strategy. ADB with the DTI, DOLE, and the Department of Tourism also prepared an employer-led skills development grants matching program called SkillsUpNet Philippines to train workers in five priority sectors: agribusiness, construction, information technology and business process management, tourism, and women-led enterprises across the Philippines beginning in 2022.

In 2021, ADB adopted a more responsive country knowledge program in view of emerging development challenges, including the impacts of the COVID-19 pandemic. The new knowledge program is better aligned with the Philippines’ long-term vision under AmBisyon Natin 2040 and ADB country partnership strategy priorities.

Future Directions

ADB’s country partnership strategy for the Philippines 2018–2023 supports infrastructure investment, local economic development, and increased social support for the bottom 40% of the population.

ADB will focus investments on projects that will connect communities through infrastructure, support the development of progressive cities to ensure high living standards, and ensure sustainability of local economic growth. The bank will also support projects that will increase the resilience of communities as the country recovers from the economic impact of COVID-19.

These operations will be complemented by a series of sequenced policy reform programs to help the country achieve its strong climate commitments and accelerate economic recovery through greater private sector participation, job creation, food security, access to health care, and less exposure to prospective epidemics and disasters triggered by natural hazards.