ADB OKs $500 million loan to improve public finance

MANILA, Philippines —  The Asian Development Bank (ADB) has approved a $500 million loan to support the Philippines’ public financial management (PFM) reform agenda.

In a statement, the multilateral lender said the loan is for the Public Financial Management (x Reform Program (Subprogram 1), which is expected to improve the government’s budget frameworks.

It will also establish a PFM system in the Bangsamoro Autonomous Region in Muslim Mindanao.

The program is anchored on the PFM Reforms Roadmap for 2024 to 2028, developed in partnership with ADB.

It will involve the digital transformation of PFM systems and setting up an enabling regulatory framework for public–private partnerships.

The program aims to promote the fair and effective devolution of public services under the Mandanas ruling.

Under the ruling, all national taxes and other taxes and fees collected by the national government should be considered in the computation of revenue allotments to local government units.

In addition, the program is expected to encourage local investments in climate resilience and disaster preparedness.

It also supports the Bangsamoro government’s own PFM systems, including local governance, budgeting and revenue frameworks.

As part of the program, a public expenditure and financial accountability assessment will be conducted to guide the PFM reforms.

“This new program signifies the Philippine government’s commitment to building an open government founded on the principles of efficiency, transparency, accountability, and good governance,” ADB Philippines country director Pavit Ramachandran said.

“The program not only strengthens the efficiency and transparency of public funds, but also promotes private sector roles in public services, as well as climate resilience and preparedness for Filipinos,” he said.