THE government and two firms in the Philippines are seeking loans of over $6 billion from the Asian Development Bank (ADB) to finance various projects on transportation, tourism, housing, energy, and agriculture.
Based on ADB data, the Philippines has 13 proposed projects covering 10 government projects and three private sector projects lodged at the ADB’s Private Sector Operations Department (PSOD).
The loans to be secured by the government amount to $6.015 billion while the loans sought by the private sector are estimated to reach P10.936 billion.
The bulk of the public and private projects in the ADB pipeline, seven projects, are slated for approval this year. Five more are up for approval in 2024 and another one is scheduled for 2025.
Meanwhile, the three projects from the private sector include the AC Energy Sustainability-Linked Facility proposed by the Ayala-led ACEN Corporation. The company is seeking a loan of P5.5 billion and a guarantee of P1.1 billion.
The project aims to promote sustainability through the use of renewable energy. This will contribute to the country’s renewable energy capacity which “has traditionally relied on coal to meet its growing electricity needs.”
“The proposed loan of P5.5 billion and partial credit guarantee of P1.1 billion will be a sustainability-linked facility with performance indicators on environmental and social matters. The loan proceeds will be used to finance
solar photovoltaic projects in the Philippines,” ADB documents stated.
The second project is the Lhoopa Promoting Green Affordable Housing Project of Lhoopa Inc., which is seeking a loan from ADB’s capital resources worth $35 million—or P1.96 billion at an exchange rate of P56 to the US dollar.
The project, ADB said, is consistent with the bank’s Country Partnership Strategy for the Philippines, which supports financing investments that promote high and inclusive growth and supports one of the three strategic pillars.
“The project will support Lhoopa to capitalize on its success to date, grow its capacity to acquire, renovate, construct and sell affordable properties, and achieve its goal of delivering 4,000 affordable houses annually in the Philippines by 2025 and 8,000 by 2028 from around 1,000 in 2022,” ADB documents stated.
The last project is the Ison Nationwide Digital Connectivity Project of ISON Tower Ltd Inc., which will require a loan of $42.43 million or, at the P56 to the greenback exchange rate, P2.38 billion.
ADB said the project involves a senior secured project finance loan of up to P4.8 billion: P2.4 billion through ADB OCR, and P2.4 billion through parallel loan to support development, construction, and operations of up to 800 telecommunications towers in the Philippines.
“Once ADB confirms that these conditions have been satisfied, lenders will disburse up to an aggregate of P4.8 billion [approximately $84.9 million]. Each drawdown will be right-sized in line with project milestones and contracted cash flows achieved,” ADB said.
Meanwhile, the largest government project is the Laguna Lakeshore Road Network Project, requiring a $2-billion loan from ADB’s Ordinary Capital Resources.
“The investment project is aligned with ADB’s country partnership strategy for the Philippines, 2018-2023, which supports accelerating infrastructure and long-term investment,” ADB documents stated.
“The investment project is also aligned with ADB’s Strategy 2030 and will support the following operational priorities: addressing remaining poverty and reducing inequalities; making cities more livable; accelerating progress in gender equality; tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability; and strengthening governance and institutional capacity,” it added.
ADB said that alongside promotion of public transport, the project, which is an enhanced road network, will be critical in addressing transport issues in the area, including reducing traffic congestion.
Currently, ADB said, the road network connecting the National Capital Region (NCR) and Laguna Province is in poor condition and the two main corridors—South Luzon Expressway and the Manila South road—are already congested.
Apart from this, another big-ticket project is the Bataan-Cavite Interlink Bridge (BCIB) Project, requiring a loan of $1.95 billion. The project will create a permanent road link between the provinces of Bataan and Cavite.
The BCIB will be approximately 32 kilometer (km) long, comprising two cable-stayed bridges with the main spans of 900 and 400 meters for navigation channels, 24 km of marine and land viaducts, and 5 km of approach roads.
In its absence, the fastest way to reach Central Manila from Bataan is by ferry. ADB said, however, that ferry services between Bataan and Central Manila are limited to three services a day on weekdays.
“On average, trips by all modes [road and ferry] take over 230 minutes for one-way trip. A direct connection between Bataan and Cavite would reduce travel time between Bataan and the southern provinces in Luzon and NCR by at least 50 percent, thus enhancing economic integration of the provinces and regions of Luzon,” ADB documents stated.
The Laguna Lakeshore Road Network Project and the BCIB are slated for approval by the ADB Board this year.
Other government projects include the Integrated Flood Resilience and Adaptation Project-Phase 1, requiring a loan of $303.24 million and a $680,000 worth grant; the Domestic Resource Mobilization Program (Subprogram 1), $400 million; and Sustainable Tourism Development Project, $100.81-million loan and $500,000 grant.
The list also includes the Baguio Resilient City Tourism Project, requiring a $61-million ADB loan; Manila Metro Rail Transit Line 4 Project, $900 million; Mindanao Irrigation Development Project Phase I, $100 million; City Disaster Insurance Pool Project, $100 million; and Mindanao Agro-Enterprise Development Project, $100 million.
In April, ADB said the Philippines aims to secure some $4 billion worth of loans this year ahead of the approval of the Manila-based multilateral development bank’s Country Partnership Strategist (CPS).
Former ADB Philippine Country Office Head Kelly S. Bird said the loans will cover eight projects, two of which have already been approved by the ADB Board while the other six may secure approval throughout the year.
Meanwhile, Bird said the CPS for 2024 to 2029 may be approved by the ADB Board early next year. The CPS, which is aligned with the administration’s eight-point agenda and the Philippine Development Plan 2023-2028, will be crafted using three pillars: intensified climate action; climate-smart transportation and digital transformation; and investing in Filipinos.
Under climate action, ADB aims to help the country undertake policy reforms and finance, resource mobilization; capacity building for climate change related agencies and the PPP Center; and finance investments.
These investments will be focused on mitigation, adaptation and biodiversity protection as well as food security/agriculture; flood protection; irrigation; disaster management and resilience; and protecting biodiversity.
Under climate-smart transportation and digital transportation, the ADB intends to help government undertake reforms such as the use of electronic vehicles in mass transport, specifically electronic buses; institutional capacity building; and other investments such as pedestrian walkways, bridges, expressways, and road networks.
Projects and programs to invest in Filipinos include those that address the learning losses in education; developing technological and vocational skills; business and employment recovery; social protection; helping vulnerable mothers and child nutrition; and universal healthcare and health sector investments.