MANILA, FEBRUARY 2, 2012—The Department of Finance (DOF), Development Bank of the Philippines (DBP), and the World Bank signed today a tripartite loan agreement for a project designed to promote investments in local public infrastructure and services.
Approved by the World Bank Board of Executive Directors on December 1, 2011, this new US$50 million financing will fund the Regional Infrastructure for Growth Project (RIGP) designed to stimulate physical and economic integration among a number of local government units (LGUs) as well as support post-disaster initiatives through improved access to finance.
According to DBP President and Chief Executive Officer Francisco F. Del Rosario Jr., RIGP builds on DBP’s existing support for improved physical and economic integration through inter-modal systems—such as the roll-on-roll-off (RORO) network under the DBP’s CRUISE (Connecting Rural Urban Intermodal Systems Efficiently) Program—by encouraging LGUs to work with each other and with private sector partners to improve connectivity and access to better infrastructure development and services, especially to poor communities.
“RIGP will finance a wide array of local public infrastructure and services that will promote physical and economic integration among LGUS. Priority projects include those that are identified in LGUs’ local development and physical framework plans,” Mr. Del Rosario said.
DBP will on-lend the US$50 million loan to LGUs, public utilities or eligible local government-owned and controlled corporations, and private sector enterprises in developing local infrastructure as well as providing services through public-private partnerships (PPP).
In addition to offering direct retail sub-loans, DBP will also channel financing through wholesale loans to eligible private financial institutions (PFIs) for on-lending to local service providers.
Signing for the Government of the Philippines, DOF Secretary Cesar V. Purisima said that “RIGP is also a timely response to the needs of LGUs in calamity stricken areas, such as those damaged recently by typhoon Sendong, for which I congratulate DBP, the World Bank and all those who collaboratively worked to make the facility available at the time when it is needed most.”
“RIGP’s objectives are aligned with the general thrusts of the Government to support LGUs and communities in many parts of the country that continuously face development challenges such as inadequate infrastructure and basic services,” said Secretary Purisima.
Among the eligible projects for financing include disaster risk mitigation (sea walls, flood protection, slope protection); environmental infrastructure (water supply, solid waste facilities, drainage systems); agriculture support systems (irrigation, small impounding reservoirs, supply chain infrastructure); social (school buildings, hospitals, health centers); transport (provincial and local roads, local ports, public transport facilities); and tourism support (eco-parks, convention centers, heritage sites, resorts).
During the signing of the loan agreement, Mr. Motoo Konishi, the newly designated World Bank Country Director for the Philippines reiterated the World Bank’s commitment to support inclusive growth in the Philippines through its various financing and technical assistance programs.
“RIGP is a product of the continuing partnership between and among the World Bank, the Philippine Government and DBP in supporting local government units as they fulfil and balance their mandate as local development managers and providers of basic services,” said Mr. Konishi.
“The World Bank recognizes the potential impact of RIGP on growth and economic development as it helps the provision of facilities that will promote accessibility, connectivity, economic opportunities and job creation, especially for lower income LGUs,” Mr. Konishi added.