In his latest State of the Nation Address (SONA), President Rodrigo Duterte admitted that the government has faced some “difficulties” in the country’s COVID-19 response. He said that they are struggling to increase our testing capacity and to find the “perfect” system of distributing financial aids to thousands of families.
President Duterte added that the pandemic has indeed taken its toll on the country—the economy has dropped, businesses have closed, schools have been disrupted, to name a few. Despite this, the President said that the country’s economy is nonetheless in a better position to “weather the crisis caused by the COVID-19 global pandemic.” (Read: UP Expert Predicts 140,000 COVID-19 Cases by End of August)
This statement from the President comes after numerous loans were filed by the government to help support the country’s COVID-19 response. In the past few months, the administration has signed loans that amount to P386.6 billion, causing the Philippines’ debts to balloon to a whopping P8.89 trillion.
Where did the administration source these loans from? We break down the different banks and lenders that the Philippine government has tapped in relation to its COVID-19 response. (*Note: the data presented is as of July 1, 2020)
Agence Française de Devéloppement (AFD)
AFD is the aid agency of France which has signed two loan agreements with the Department of Finance (DOF) for a 150- and 100-million euro loan. These loans are said to be used to help the economy recover after the huge hit it took because of the pandemic. In peso, the total of the country’s loans from AFD amount to P14 billion.
Japan International Cooperation Agency (Jica)
Despite being hit by the coronavirus pandemic, the Japan International Cooperation Agency (Jica) has lent P25.3 billion for the country’s COVID-19 response. The effectivity of the said loan will be in the last week of July and it will be the first loan from a bilateral partner. This is on top of the P57 and P18.5 billion loans we acquired from them for infrastructure under the Build, Build, Build program.
Asian Infrastructure Investment Bank (AIIB)
The China-led bank has signed an agreement with the Philippines for a loan amounting to $750 million or around P38 billion. The agreement sets specific “milestones” that the Philippine government should fulfill. A milestone included is ramping up the testing capabilities of the government. The full amount is expected to be disbursed in May 2021.
World Bank (WB)
The World Bank has approved a $100 million loan for the COVID-19 response project of the Philippines to “help meet urgent healthcare needs in the wake of the pandemic and bolster the country’s public health preparedness.” The loan will primarily be for the provision of personal protective gear and medical equipment to frontliners.
Asian Development Bank (ADB)
Philippines-based ADB has also lent the Philippine government $1.5 billion for its COVID-19 response. The loan aims to help the country “strengthen [its] health care system in its fight against the pandemic.” Aside from this, it has also signed an agreement for a $200 million loan solely to support the poor during the pandemic. This is partly because of the amount of Filipinos who have lost their jobs due to the COVID-19 health crisis.
On top of these loans, the Philippines has also received bonds amounting to $2.35 billion and grant assistance from the Japanese government and the Asian Development Bank amounting to $18.36 million and $8 million, respectively.