The Department of Finance said the deal for the ADB's Countercyclical Support Facility Pandemic Response Option (CPRO) was signed on Thursday, April 23. This would fund the government's COVID-19 Active Response and Expenditure Support (CARES) program.
"Our new financing, the largest budget support ever to the Philippines, is part of a well-sequenced support package that will provide financial and technical advice to help the government meet the challenges posed by a crisis that is wreaking havoc both globally and nationally," ADB President Masatsugu Asakawa said. (READ: ADB warns global cost of virus could top $4 trillion)
Finance Secretary Carlos Dominguez III said the "quick-disbursing budget-support facility" will also help bridge the higher deficit requirement estimated at P990.1 billion or around $19.5 billion brought about by the pandemic's economic fallout.
The first $500 million from the ADB's CPRO facility will be disbursed in US dollars amounting to $250 million, while the other half will be in euros.
This portion of the loan is payable in 10 years, inclusive of a 3-year grace period.
The remaining $1 billion will also be divided equally into the US dollar and euro equivalents of the amount under the terms of the loan accord. This portion has a shorter payment period of 5 years, inclusive of a 3-year grace period.
The disbursement of the first $1-billion tranche is expected this April, while the remaining $500 million may be disbursed on or before June 20.
The ADB earlier provided assistance to the Philippines' coronavirus response efforts with a $3-million grant, which was used for the government's purchase of medical supplies.
It also approved an emergency grant of $5 million for a food distribution program that has benefited 55,000 poor households in Metro Manila and neighboring areas.
"We thank the ADB under the leadership of President Masatsugu Asakawa for swiftly responding to the Philippines' call for funding support in this time of crisis," Dominguez said.
"We thank the bank as well for streamlining its operations to quickly deliver its assistance and for tripling the size of its response package from $6.5 billion to $20 billion to help developing member-countries combat COVID-19." – Rappler.com