MANILA, Philippines – President Rodrigo Duterte’s ambitious Build, Build, Build program is getting another massive boost, as the Asian Development Bank (ADB) approved a $400-million policy-based loan for the growth of domestic capital markets.

The ADB loan aims to address “constraints that have limited the growth of the Philippine capital markets,” particularly government and corporate bond markets, the ADB said on Tuesday, May 26.

The ADB said the latest financing will build a “vibrant domestic institutional investor base that will become a sustainable source of long-tenor infrastructure finance.”

“By boosting infrastructure finance, the capital market development program will support higher public infrastructure spending for years to come,” the lender added.

Duterte’s economic team aims to increase public spending on infrastructure to 7% of gross domestic product by 2022, much higher than the 5.5% in 2018 and an average of 2.8% in the last 3 decades.

However, several flagship programs have hit a snag, as some were simply not feasible. The list of infrastructure projects has since been revised. (READ: LIST: Duterte’s new and shelved infrastructure projects)

Infrastructure spending is also a key program of the Duterte administration in its bid to lift the economy out of recession amid the coronavirus pandemic. (READ: Philippines banks on infrastructure push to revive economy from virus)

“By developing domestic capital markets, funds are generated to support higher levels of long-term investments and sustainable quality job creation. The program approved today will support the Philippine government’s development goals, including its response to the COVID-19 pandemic,” ADB vice president Ahmed Saeed said.

This new loan brings the ADB’s total lending to the Philippines to $2.1 billion so far in 2020. It earlier approved its largest budget support for the Philippines to date, a $1.5-billion loan for the Philippines’ COVID-19 response.

It also loaned the Philippines $200 million for subsidies to the poor. – Rappler.com