ADB eyes $1-B loan to RP

The Asian Development Bank (ADB) said yesterday it plans to lend the Philippines $1 billion over the next three years, with the focus of assistance on projects to develop the troubled southern region of Mindanao.

"Today’s priorities include the development of the southern Philippines, where there is a high incidence of poverty," said Gunter Hecker, head of the ADB’s RP country office which was officially opened yesterday.

Parts of Mindanao rank among the country’s worst economic backwaters despite its rich agricultural resources. Mindanao gained international notoriety last year when the extremist Muslim group Abu Sayyaf kidnapped a number of Asian and European hostages.

The Philippines has borrowed nearly $8 billion from the ADB to finance development projects, the bank said in a statement.

Hecker said assistance for Mindanao will include developing infrastructure, strengthening transmission systems for rural electrification, microfinance for small businesses and improving the management of forest and coastal resources.

On the development of the whole Philippine economy, Hecker forecast growth of around 3 percent this year, markedly below an expansion of at least 3.8 percent forecast by the government.

"Investor confidence is recovering, but the difficulties are not over," said Hecker, stressing that there is a special need to rein in the budget deficit.

Hecker said setting up a country office will strengthen the ADB’s partnership with the government and other donor agencies in its development assistance to the Philippines.

But Hecker was critical of the Philippines’ poor record of project implementation, which has been marked by long delays in the disbursement of funds and "worse-than-average records of project success." – Ted Torres, Marichu Villanueva