Government to tap 2 program loans worth $350M

The government is planning to tap two program loans worth $350 million next year,   National Treasurer Roberto Tan said yesterday.

Tan said the loans, originally programmed for this year, may be drawn in 2009 instead.

The first is the $200-million program loan from the World Bank which is intended to support the government’s social protection activities.

Another loan is the $150-million program loan from the Asian Development Bank. This is intended for judicial reforms, Tan said. “The program loans are for budget support,” he said.

Tan noted, for instance that the $200-million loan from the World Bank would help fund the government’s Conditional Cash Transfer (CCT) program.

The scheme, implemented last year, is a poverty alleviation and social assistance strategy similar to those adopted in some Latin American and South East Asian countries.

Under the program, the Department of Social Work and Development (DSWD) provides money to the poor on the condition that they make investments in human capital like sending their children to school or bringing them to health centers regularly.

The CCT program shall address low educational achievement, high maternal and infant mortality rates, high malnutrition rate and child labor.

To ensure that children go to school, receipt of money is contingent on enrollment and regular attendance of at least 85 percent of school days. Receipt of money depends on regular visits of children to health centers for immunization and preventive health care as well as improvement in the nutritional status of the children.

Officials said that for 2009, the Philippines is planning to borrow $1.5 billion from the international capital market.

Earlier, Finance Secretary Margarito Teves said the Philippines plans to borrow $1.5 billion from foreign commercial sources in 2009 or three times the $500 million it raised last January from the sale of government bonds.

Aside from this, the government would source another $1.1 billion from multilateral lending agencies led by World Bank, Asian Development Bank, and Japan Bank for International Cooperation.

Of the total amount in the form of official development assistance (ODA) loans, officials said about $500 million for program loans and another $600 million for project loans. This is the same level as the programmed ODA loans for this year.