Photo: Xinhua

 

The Philippines has signed an agreement with the Asian Infrastructure Development Bank (AIIB) committing the multilateral lender to extend a loan of 750 million US dollars to support government efforts to mitigate the COVID-19 outbreak.

The Philippine Department of Finance (DOF) said on Tuesday that it intends to use the new loan to augment the funds needed to slow down the viral transmission and implement an economic recovery plan design to fuel growth and create jobs.

"This loan accord cements AIIB's commitment to co-finance with the Asian Development Bank (ADB) the Philippines' COVID-19 Active Response and Expenditure Support (CARES) program, a quick-disbursing budget support facility designed to fund the government's efforts to combat COVID-19 and mitigate the adverse impact of the contagion on the economy," the DOF said in a statement.

"The loan package from the AIIB will help augment our funding requirements necessary to mitigate the severe negative impact of COVID-19 on our people and our economy," Dominguez said, adding the new loan "will go a long way in helping (the Philippine) economy recover and emerge stronger after the crisis."

The DOF said it expects the full disbursement of the 750 million US dollars AIIB loan within this June.

The AIIB loan carries a maturity period of 12 years inclusive of a three-year grace period.

Philippine Finance Secretary Carlos Dominguez signed an agreement last month with ADB Country Director for the Philippines Kelly Bird that would enable the government to access up to 1.5 billion US dollars in budgetary support from the bank to augment funds for the CARES program.

This ADB loan for the CARES program is under the Bank's Countercyclical Support Facility Pandemic Response Option (CPRO).

According to the AIIB, its budgetary support for the CARES program is part of its coordinated international effort to counter the COVID-19 pandemic.

Under its COVID-19 Crisis Recovery Facility, the AIIB has committed an initial 5 billion US dollars to 10 billion US dollars "to support AIIB members' urgent economic, financial, and public health needs and quick recovery from the crisis."

The AIIB's co-financing for the CARES program is the second loan it has extended to the Philippines.

The Philippines continues to grapple with the social and economic impact triggered by the COVID-19 lockdown imposed in mid-March.

At least 7.3 million Filipinos lost their jobs in April 2020 as the unemployment rate in the Philippines rose to a record high 17.7 percent in April 2020 due to the economic slowdown triggered by the COVID-19 lockdown, the Philippine Statistics Authority (PSA) said on June 5.