The Asian Development Bank (ADB) has said that it will provide a $200m loan to the Philippines for financial sector reforms to improve financial sector stability, increase the efficiency and liquidity of markets, and strengthen the regulatory environment in the wake of the global economic crisis.
ADB’s Board of Directors approved the assistance for phase 2 of the Financial Market Regulation and Intermediation Program.
The loan from ADB’s ordinary capital resources has a 15-year term with a grace period of three years and an annual interest rate determined in accordance with ADB’s LIBOR-based lending facility.
The Department of Finance is the executing agency for the full program, which is due for completion in October 2011.
Stephen Schuster, senior financial sector specialist in ADB’s Southeast Asia Department said that the crisis demonstrated the importance of maintaining financial sector stability, as well as the need to maintain sound and well coordinated regulatory oversight to reduce vulnerabilities.
"All these actions will lead to a deeper, more diversified and resilient system, resulting in improved access to finance and a greater contribution to growth and poverty reduction from the financial sector," Schuster said.
To maintain the reform momentum, ADB and the Government of the Philippines have also agreed to a two-year post program monitoring framework to gauge the impact of actions taken to date, and to push ahead with further measures to improve the regulatory environment and enhance public debt management.