The country’s finance chief has called on the Asian Development Bank (ADB) to “level up” and to consider substantially expanding its loan portfolio, to effectively assist developing countries and to be more responsive to critical needs.
Carlos Dominguez, Department of Finance secretary, said at the 45th ADB Annual Meeting Governors’ Seminar held virtually yesterday the ADB must effectively assist developing economies to bounce back as fast as the developed countries.
“However, this cannot be achieved if the bank maintains a business-as-usual approach. As I have suggested long before COVID-19 struck, the ADB must continue reinventing itself and realigning its programs to meet new realities and to stay relevant amidst the fast-changing landscape,” Dominguez said.
“To be responsive to critical needs, the ADB must level up. Specifically, there is a need for the bank to seriously consider substantial expansion of its loan portfolio in the next five-year period,” he added.
Dominguez said this will effectively support its member countries’ recovery, even if this brings forward the need for a capital increase.
Meanwhile, in an earlier event, the ADB’s top official said developing countries, such as the Philippines, are urged to reduce dependence on external financing and focus more on domestic resources such as through tax revenues.
Masatsugu Asakawa, ADB president, said in the opening event for the 45th ADB Annual Meeting the tax-to-gross domestic product (GDP) in the Asia Pacific region is relatively low compared with the other parts of the world.
“There’s much room for them (developing countries) to increase tax revenue by restructuring their tax policy or enhancing tax administration capacity,” Asakawa said in an interview posted by the ADB online.
“It will be a good idea for… developing countries (to) try to rely on more and more domestic resources, by reducing their dependency on external finance. Domestic resource means taxation, tax revenue,” he added.
In the Philippines, the tax effort in 2020 was recorded at 13.93 percent, down from 14.49 percent a year ago, as collections from revenue-generating agencies suffered last year due to the economic impact of the pandemic. – Angela Celis
