The Daily Manila Shimbun

 

Asian Development Bank approves $400 million loan to support Philippines’ Capital Market Development

May 26, 2020



The Asian Development Bank (ADB) on Tuesday has approved a $400 million 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 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 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 capital market development program will support higher public infrastructure spending for years to come.

The government’s flagship “Build Build Build” (BBB) infrastructure development program targets an increase in public spending on infrastructure towards 7 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,” said ADB Vice-President Ahmed  Saeed.

“By developing domestic capital markets, funds are generated to support higher levels of long-term investments and sustainable quality job creation. T

he program approved Tuesday will support the Philippine government’s development goals, including its response to the COVID-19 pandemic.”