The Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), and Export Import Bank of Korea (KEXIM) vowed to support the Laguna Lakeshore Road Network (LLRN) project.
The ADB has committed $1.2 billion as the initial tranche of funding, while the AIIB is contributing $188 million. The KEXIM is also providing financing for the project.
“So the Laguna Lakeshore, it's a 10 year program. It's part of a facility that ADB calls the multi-tranche financing facility. The first tranche from ADB will be $1.2 billion for this one,” ADB Country Director Pavit Ramachandran said.
He said funding includes contributions from the KEXIM and around $188 million from the Asian Infrastructure Investment Bank (AIIB). The project is planned to be implemented in phases.
That makes it $1.39 billion or approximately P79 billion for the road network project alone.
Other than that, another $500 million will also be allocated for the Second Disaster Resilience Improvement Program, which aims to improve the country’s disaster risk management policies and frameworks, Ramachandran shared on the sidelines of the Launching of the 2024-2028 Public Financial Management (PFM) Reforms Roadmap.
At present, the ADB is backing several key infrastructure projects in the Philippines, including the Bataan-Cavite bridge, Davao bus modernization, and MRT 4, alongside various flood resilience initiatives across multiple regions.
$500-million loan for PFM plan
Alongside this funding, the Manila-based bank is planning to lend $500 million to the Philippine government for the five-year PFM reform program, the country director also shared.
“So that's another policy-based loan, which will also plan for approval this year,” Ramachandran said, noting that it is greatly aligned with the roadmap exercise.
"We have a PFM, and then there is also a contingent disaster facility,” which will provide immediate resources for the Philippine government to respond to natural disasters and geophysical hazards, he added.
Beyond assessing public spending and financial accountability, the recently launched phase two of the roadmap also focuses on climate-responsiveness and disaster resilience, as well as gender.
Budget Secretary Amenah Pangandaman stated that the new budget reform roadmap has helped the government identify specific gaps in previous focus areas, enabling targeted interventions at national and local levels.
When asked about the changes in the program, Pangandaman emphasized the roadmap's 11 core strategic focus areas, which include planning, cash management, public asset management, and digital PFM, among others.
In general, the roadmap aims to reduce government corruption, improve public service delivery, and transition the PFM system from manual to digital processes.
According to Pangandaman, the country’s Integrated Financial Management Information System (IFMIS) and Budget and Treasury Management System (BTMS) will be launched this year.
Its full digitalization is expected to be completed by the end of the current administration, which would be around 2028. Initially, the systems will be piloted in five departments, with more departments and agencies to be added gradually over the coming years.
Meanwhile, Winfried Wicklein, director general at ADB, said the launching of the new roadmap “was truly inspiring, and not a small feat,” citing the 1,100 senior government officials and PFM practitioners that contributed to the development of the roadmap.
He said the Philippines is on the cusp of becoming an upper middle-income country, driven by a robust economy and increased public spending.
“However, the Philippines does confront complex challenges that could derail its growth trajectory. Among the most significant are its high vulnerability to climate change, which disproportionately affects the poor and also persistent poverty and income inequality,” he further said, which the government aims to address through the new roadmap.
“With a strong and digital PFM system, government spending and decision-making will be more timely. It will be more efficient; it will be more relevant,” Wicklein added.