The Asian Development Bank's (ADB) newest loan to its host country, the Philippines, which will finance reforms in managing public funds, is scheduled to be repaid until 2039.
Documents showed that the loan agreement for the $500-million Public Financial Management (PFM) Reform Program (Subprogram 1) was signed by Finance Secretary Ralph G. Recto and ADB Philippines country director Pavit Ramachandran last Dec. 20.
This loan takes effect 90 days after the agreement was signed and can be spent until the closing date on Dec. 31, 2025.
The 12-year principal repayment period starts in June 2028 and ends in December 2039, the loan agreement showed.
This ADB financing is aimed at enhancing the efficiency as well as inclusiveness of local and national public financial management systems.
In particular, the program aims to improve national public financial management frameworks; foster fiscal decentralization for service delivery; as well as establish a public financial management system for the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
In an earlier statement, the ADB noted that this program is a key part of the Philippine government's PFM Reforms Roadmap 2024-2028, which the Manila-based multilateral lender had co-developed, and then endorsed by no less than President Ferdinand R. Marcos Jr.
Specifically for the newly formed BARMM, this ADB-funded program shall promote peace in the formerly war-torn region by focusing on fiscal accountability and autonomy, which are deemed essential to build trust between the Bangsamoro government and its people.
It would also help the Bangsamoro government develop its PFM systems for budgeting, local governance and revenue-generation, according to the ADB.