With the Philippines expected this year to rise to upper middle-income status ahead of schedule, it is making its first-ever contribution to the grant fund of the Asian Development Bank (ADB) intended for the most vulnerable and least developed member-countries of this Manila-based multilateral institution.
Finance Secretary Carlos Dominguez III said the Philippines’ contribution to the Asian Development Fund (ADF) will be announced during a pledging session to be held on the sidelines of the ADB’s 53rd Annual Meeting set in May this year in the city of Incheon in the Republic of Korea.
Contributing to the Fund will prove beneficial to the Philippines and the rest of the Asia-Pacific, he said, given that the growth of least developed countries (LDCs) will provide the Philippines and the rest of the region with new potential markets to further bolster domestic economic expansion as well as regional growth.
Secretary Dominguez said Manila`s contribution to the ADF conveys goodwill to the region’s LDCs, whose economic and social development will also have an external benefit to the Philippines in terms of strengthening regional health security by preventing the transmission or outbreaks of such as HIV?AIDS, malaria, tuberculosis, and other major illnesses.
He said the country’s contribution to the ADF comes at a crucial time when assistance from ADB’s European partners may be possibly reduced.
“Since the Philippines’ graduation from ADF assistance in 1999, we have yet to contribute to the replenishment of the Fund. Now, as we move to the upper middle-income status, the country is poised to extend help to the LDCs, including some of our neighbors in the Association of Southeast Asian Nations (ASEAN) and the Pacific,” Secretary Dominguez said.
This pledging session for ADF 13 scheduled on May 2 will be the 12th time that the ADF will be replenished since it was established in 1974.
The ADF’s total replenishments has reached US$4.01 billion, inclusive of US$2.59 billion in donors’ contributions.
In his first courtesy call on President Duterte, which was held recently at the Department of Finance (DOF) office in Manila, ADB President Asakawa thanked the Chief Executive for Manila`s planned contribution to the ADF.
Mr. Asakawa also reiterated during his meetings with President Duterte and with Secretary Dominguez ADB`s full support for the Philippine government`s "Build, Build, Build" infrastructure modernization program. The ADB President also congratulated the government for its remarkable success in bringing down the national poverty rate to 16.6% in 2018 from 23.3% in 2015 and pledged the Bank`s continuing support for the Philippines` efforts to reduce poverty and create high-quality jobs for Filipinos.
The ADB`s ADF grant facility aims to promote poverty reduction and improvements in the quality of life of people in LDCs of the Asia-Pacific region.
It is specifically dedicated to support ADB’s poorest and most vulnerable developing member-countries, such as Afghanistan, Cambodia, Kiriba, Kyrghyz Republic, Maldives, Marshall Islands, Federated States of Micronesia, Nauru, Nepal, Samoa, Solomon Islands, Tajikistan, Tonga, Tuvalu and Vanuatu.
“With the proposed Philippine contribution to ADF 13, the country is expected to benefit in terms of further driving its growth from the possible development of new markets within the region,” Secretary Dominguez said.
The ADF is currently being supported by non-regional donors, such as selected European countries, the United States, Canada, and Turkey, and regional donors (Australia, China, India, Japan, Kazakhstan, South Korea, New Zealand, Taipei, and selected ASEAN countries).
Some ASEAN countries that had graduated from ADF assistance like Thailand and Indonesia are now donors to the ADF.
The Philippines has been supportive of various initiatives of other institutions such as the World Bank (WB), International Monetary Fund (IMF) and the United Nations (UN) to assist LDCs.
It is a continuous donor to the WB`s International Development Association (IDA) and the UN’s International Fund for Agricultural Development (IFAD).
The Philippines, through the Bangko Sentral ng Pilipinas (BSP), extended until the end of 2020 a US$1-billion loan facility to the IMF through a bilateral borrowing agreement, which was first signed in 2013, to support countries going through financial difficulties.
This loan will help strengthen the global financial safety net and contributes to the IMF’s overall lending capacity of about US$1 trillion for an additional year.