A RECENTLY approved $300-million (P14.6 billion) loan from the Asian Development Bank (ADB) will support the faster rollout of the national ID system and help the country achieve its goal for broader financial inclusion, the Department of Finance (DoF) said.
The loan, approved by the ADB Friday, will “support the accelerated rollout of the national identification system” and allow more Filipinos to open bank accounts, Finance Secretary Carlos G. Dominguez III said in a Viber message to reporters over the weekend.
“The approval of the ADB Inclusive Finance Development Program, Subprogram 2, will help the government reach its financial inclusion targets. Filipino families will be less vulnerable to onerous lending practices, and government subsidies can reach beneficiaries faster and more efficiently,” Mr. Dominguez added.
The government plans to register the first five million Filipinos for national IDs this year, ramping up to 40 million next year. The measure aims to help better establish the identity of government aid recipients.
In a statement Friday, the ADB said the loan will support programs of the central bank, the Securities and Exchange Commission, the Philippine Guarantee Corp. (Philguarantee), the Philippine Statistics Authority, the Department of Justice, and the Insurance Commission, which aim to double the number of Filipinos holding bank accounts by 2023.
“The loan will also support the strengthening of agriculture value chains, financial literacy in basic education, digital payments, and Islamic banking,” Mr. Dominguez said.
The ADB’s loans to the Philippines include $400 million to modernize the agriculture sector; $26.5 million to enhance local governments’ capacity to generate revenue; $500 million for the conditional cash assistance program; $400 million to develop the capital markets; $200 million for the social protection program and $1.5 billion to support the government’s pandemic containment efforts.
“Even with this loan, our debt position will remain strong and sustainable. More importantly, returns of this public investment will accrue to millions of working Filipino families and small businesses who are currently excluded from the financial system. It will also boost our efforts to build our economy back better,” the Finance chief said.
The government expects the budget deficit to rise to 9.6% of gross domestic product (GDP) this year due to rising pandemic expenses and weak tax collections.
The debt stock is projected to increase to 53.9% of GDP at the end of 2020 from 39.6% last year. — Beatrice M. Laforga