IE 11 is not supported. For an optimal experience visit our site on another browser.

ADB approves $500M stimulus loan for Philippines

The Asian Development Bank's board of directors has approved a $500 million short-term loan for the Philippines to counter the global economic crisis, the bank said Monday.
/ Source: The Associated Press

The Asian Development Bank's board of directors has approved a $500 million short-term loan for the Philippines to counter the global economic crisis, the bank said Monday.

It is the first approval of a loan from the Manila-based lender's $3 billion facility that is aimed at supporting developing economies as they increase fiscal spending in response to the economic crisis.

To be eligible to access the fund, developing member countries must be adversely affected by the global economic crisis, demonstrate sound economic policies and have a program to stimulate the economy amid the downturn.

Bangladesh, Indonesia, Vietnam, Kazakhstan, Pakistan and Sri Lanka have pending requests for loans from the facility, which are subject to approval by the ADB's board.

The loan will help close the Philippine government's budget financing gap for this year and support its 2009 budget expenditure program to counter the crisis, including labor-intensive infrastructure projects, the bank said.

"This loan is critical for the Philippine government to stimulate the economic recovery, protect its social spending and poverty reduction programs, and continue with its longer-term development objectives in 2009," said Arjun Thapan, director general of the ADB's Southeast Asia Department.

The loan will have a five-year repayment term, with a three-year grace period. It will cost around 200 basis points over ADB's financing cost, reflecting spreads prior to the onset of the global economic crisis.

___

On the Net:

Asian Development Bank: http://www.adb.org