ADB approves $400-M loan to help PH cut red tape
The Asian Development Bank (ADB) has approved a $400-million loan to support the Philippine government’s reforms to improve ease of doing business and help the country attract more job-generating foreign investments.
The financing, called the Business Environment Strengthening with Technology Program (BEST) Subprogram 1, will support private sector development reforms to streamline and improve transparency of regulatory requirements and processes for businesses.
It also seeks to facilitate investment in priority sectors with strong development impact, as well as strengthen digital delivery of government services to businesses and investors.
While the new ADB loan will add to the government’s outstanding debt of P17.56 trillion as of October, it comes with concessional rates and more favorable terms than commercial borrowing. The new financing is sourced from ADB’s ordinary capital resources, in regular terms, with interest to be determined in accordance with the lender’s flexible loan product.
The loan is payable in 15 years, including a grace period of three years.
“The private sector is an important engine of growth and job creation. Their role in the country’s overall economic development cannot be overstated,” said ADB country director for the Philippines Andrew Jeffries.
“We are committed to assisting the Philippines in finding innovative ways to create an enabling environment that would spur a more dynamic business sector—one that will help drive faster economic growth,” he added.
In 2024, the Philippines ranked 52nd out of 67 economies in the International Institute for Management Development’s World Competitiveness Ranking, while it placed 36th out of 50 economies in the operational efficiency pillar of the World Bank’s Business Ready framework.
The rankings, the ADB said, pointed to regulatory and bureaucratic frictions that hinder new businesses and slow productivity and innovation, particularly for micro, small and medium-sized enterprises.
But the multilateral lender noted that the government has prioritized addressing existing barriers in doing business to boost the country’s competitiveness and drive increased investments and job creation.
The ADB’s said the financing would complement this by helping authorities establish better legal, regulatory and institutional frameworks to facilitate starting and operating a business, including faster permit and licensing procedures and government approval of new ventures.
The program also aims to improve investor experience through strengthening investment facilitation. It will likewise provide clear, updated and reliable information via online investors’ guidebooks and a digital database of business regulations through the Philippine Business Regulations Information System launched by the Anti-Red Tape Authority.
The program also focuses on facilitating investments in priority sectors such as renewable energy and digital infrastructure. These sectors are crucial for development, as greater investment in renewable energy generation and enhanced digital infrastructure both help reduce greenhouse gas emissions.
