THE Asian Development Bank (ADB) expects to approve this year a $500-million loan to help the Philippines adopt public financial management (PFM) reforms.
“We have completed several policy-based reform programs which focused on enhancing PFM. And in fact, two important new policy-based programs will be approved and committed later before the end of this year,” Winfried F. Wicklein, director general of ADB’s Southeast Asia Department, told a forum.
“One is the PFM Reform Program Sub-Program 1, which will go to our board soon, and then also the Second Disaster Resilience Improvement Program.”
The Philippines is seeking a $500-million loan from the ADB under the PFM Reform Program Sub-Program 1. It is also looking at another $500 million under the Second Disaster Resilience Improvement Program. Both will be funded by the Manila-based bank.
The proposed loans would help achieve the targets set in the government’s Public Financial Management Roadmap, which seeks to ensure the efficient use of government funds.
The roadmap and the resulting enhancements to public spending are expected to help the Philippines achieve upper-middle income status, Mr. Wicklein said.
According to the World Bank’s income classification system, the Philippines remained a lower middle-income country with a gross national income per capita of $4,230 in 2023.
However, the chances of attaining upper middle-income status could be hampered by the Philippines’ infrastructure deficit, as well as shortcomings in education, health, and job creation, among others, according to Mr. Wicklein.
“Achieving middle- and higher-income status will require continuous reforms, and this includes a robust public financial management reform strategy and roadmap,” he said.
“It targets the enhancement of systems needed for ensuring efficiency and effectiveness of the use of public funds.”
The roadmap would also help “ensure that the money is targeted for quality public services for the Filipino people,” Mr. Wicklein also said.
The PFM, which was approved by President Ferdinand R. Marcos, Jr. last month, addresses strategic focus areas: planning and budgeting linkages; cash management; public asset management; accounting and auditing; PFM capacity development; and the digital PFM.
The Philippines was the biggest recipient of financial assistance from the ADB last year at $8.4 billion. — Beatriz Marie D. Cruz
