RP signs 150-million euro deal with France

MANILA, Philippines - The Philippines has signed its very first program loan agreement last week with the Agence Francaise de Developpement (ADF) for a local government financing and budget reform loan of 150 million euros.

The program, a co-financing with the Asian Development Bank, aims to contribute to improved efficiency and effectiveness in the delivery of basic public services to residents by increasing fiscal resources and financing options for local government units (LGUs).

ADF is a bilateral development finance institution which implements the French government’s development aid policies and promoting green and inclusive growth mandate in the Philippines.

The loan is the first signed with the Philippines and is expected to foster further bilateral cooperation with France.

The loan has a maturity period of 20 years inclusive of a five-year grace period.

Finance Secretary Margarito Teves, ADF director of Asia Department Martha Stein-Sochas and French Ambassador to the Philippines Thierry Borja de Mozota signed the agreement last week.

Teves said the agreement would continue and deepen the government’s efforts in enabling the LGUs to avail of enhanced capacities to plan and budget for the general welfare of their constituent communities in a transparent and accountable way.

More specifically, the program focuses on the areas of inter-governmental fiscal relations, fiscal management, planning and public expenditure management performance measurement and service delivery in credit financing.

Teves said the program would improve on the timeliness and transparency of local government shares in national revenues and deepen reforms in fiscal management.

Furthermore, the program is expected to improve local government access to public and private sources of capital and reduce local government dependency on internal revenue allotments.

Under the program, a technical assistance grant of up to 300,000 euros will also be provided by AFD to the government for the improvement of local revenues for environmental public services and in the preparation of local urban planning integrating environmental issues.