As part of a coordinated international effort, the Asian Infrastructure Investment Bank (AIIB) has approved a USD750-million loan to the Philippines to stave off the worst public health and economic effects of the COVID-19 pandemic.
Cofinanced with the Asian Development Bank, the budgetary support will go toward increasing the government’s testing capacity, bolstering vulnerable sectors (including agriculture) and providing conditional cash transfers and emergency assistance to poor households. Additionally, at least one million micro, small and medium-sized enterprises, of which 58 percent are registered to women, will benefit from wage subsidies.
The Philippines is one of the first developing countries globally and the first in Southeast Asia to have introduced strict quarantine measures to limit the spread of the disease. The lockdown measures are expected to take a heavy toll on the country’s economic growth with the International Monetary Fund estimating that gross domestic product could see a sharp contraction from 6.2 percent to 0.6 percent for 2020.
“The focus of our efforts is to help the government tackle the immediate health and economic challenges posed by the pandemic. AIIB’s support will contribute to building economic resilience and ensuring quick recovery,” said AIIB Vice President, Investment Operations, D.J. Pandian.
While AIIB does not have a regular instrument for policy-based financing, the Bank is extending such financings on an exceptional basis under the COVID-19 Crisis Recovery Facility to support its members through projects cofinanced with the World Bank or the Asian Development Bank.
AIIB’s COVID-19 Crisis Recovery Facility, created as part of the coordinated international response to counter the pandemic, has an initial size of USD5-USD10 billion to support AIIB members’ urgent economic, financial, and public health needs and quick recovery from the crisis. AIIB is currently reviewing projects from its members. Projects being proposed under the facility can be found here. Additional information about the Philippines COVID-19 Active Response and Expenditure Support Program can be found here.
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia. Headquartered in Beijing, we began operations in January 2016 and have now grown to 102 approved members worldwide. By investing in sustainable infrastructure and other productive sectors in Asia and beyond, we will better connect people, services and markets that over time will impact the lives of billions and build a better future.