The Agence Franí§aise de Développement (AFD) has committed 250 million euros, or approximately P14 billion, in loans for two projects on infrastructure development and financial inclusion in the Philippines, the Department of Finance (DOF) said in a statement yesterday.
The DOF and AFD have signed two credit facility agreements to support two major policy reforms of the Philippine government that aim to expand financial services to vulnerable sectors and increase private sector participation in infrastructure projects.
The DOF said both programs, co-financed with the Asian Development Bank (ADB), also aim to support the Philippine economy and strengthen its resilience in the post-coronavirus disease 2019 (COVID-19) period.
Carlos Dominguez, DOF secretary, and French ambassador to the Philippines and to Micronesia Nicolas Galey signed the loan agreements for the Inclusive Finance Development Program (IFDP) worth 100 million euros and the Expanding Private Participation in Infrastructure Program (EPPIP) worth 150 million euros on June 9.
“The Philippine government is grateful to the AFD for co-financing with the ADB two programs supportive of President Duterte’s overriding goal of accelerating infrastructure development in order to spur high growth, attract investments, create jobs and achieve financial inclusion for all Filipinos,” Dominguez said.
“Such financial support from the country’s development partners like AFD for our priority programs is crucial at this time when the Philippine government is embarking on its resources-intensive, four-pillar strategy to suppress the coronavirus outbreak and provide relief to our most affected sectors while restarting the stalled economy to a quick recovery from the global economic slump induced by the lethal virus,” he added.
The 100 million euro policy-based loan for the first sub-program of the IFDP will help fund initiatives of the Philippine government to expand financial services across the country, especially among small entrepreneurs, farmers and fisherfolk, women and other vulnerable sectors.
The AFD loan for the program will also help the government consolidate its institutional and regulatory environment, improve its financial infrastructure, and strengthen the capacities of financial service providers, supervisors and regulatory bodies in line with its goal of building an inclusive and resilient financial sector.
In addition, AFD will also finance a 1.5 million euro technical assistance (TA) program to strengthen the capacities of financial inclusion stakeholders.
The TA program, which will be carried out in partnership with the Bangko Sentral ng Pilipinas and the Rural Bankers Association of the Philippines, aims to help accelerate the digital transformation of the Philippines’ financial institutions, especially those serving rural communities.
Meanwhile, the DOF said the 150 million euro loan for the EPPIP aims to heighten private sector participation in infrastructure financing in line with the government’s goal of fast-tracking the implementation of its Build, Build, Build program to jumpstart the economy and create more jobs.