MANILA, May 26 (Xinhua) -- The Asian Development Bank (ADB) on Tuesday said it has approved a 400-million-U.S.-dollar policy-based loan to support the Philippine government's efforts to strengthen domestic capital markets and reach its development goals of high, sustained economic growth and poverty reduction.
The Manila-based bank said the Support to Capital Market-Generated Infrastructure Financing Program, subprogram 1, aims to address key constraints that have limited the growth of domestic capital markets, especially government and corporate bond markets.
It said the program also focuses on building a vibrant domestic institutional investor base that will become a sustainable source of long-tenor infrastructure finance. By boosting infrastructure finance, the ADB said the capital market development program will support higher public infrastructure spending for years to come.
The Duterte administration's flagship "Build, Build, Build" (BBB) infrastructure development program targets an increase in public spending on infrastructure towards 7.0 percent of gross domestic product by 2022, up from 5.5 percent in 2018 and an average of 2.8 percent in the last three decades.
"Resilient and vibrant capital markets are key to achieving economic development, growth, and poverty reduction as set out in the government's long term strategy AmBisyon Natin 2040," ADB Vice President Ahmed Saeed said.
AmBisyon Natin 2040 is the long-term vision and aspirations of the Philippines in the next 25 years.
"By developing domestic capital markets, funds are generated to support higher levels of long-term investments and sustainable quality job creation. The program approved today will support the Philippine government's development goals, including its response to the COVID-19 pandemic," Saeed added.
The ADB said this latest assistance builds on decades of ADB support to financial sector reforms in the Philippines, including strengthening governance and investor protection measures in the wake of the 1997 Asian financial crisis.
This new loan brings ADB's total lending to the Philippines to 2.1 billion U.S. dollars so far this year, the bank added.
ADB approved a 1.5-billion-U.S.-dollar loan for the COVID-19 Active Response and Expenditure Support Program on April 23 and 200 million U.S. dollars in additional financing for the Social Protection Support Project on April 27. Enditem
