Gov’t boosts project loan use in H1 amid infra push
The national government sharply increased its drawdown of project loans in the first half of the year as it tapped more foreign financing to accelerate infrastructure development.
According to the Development Budget Coordination Committee (DBCC), project loan disbursements nearly doubled to P74.2 billion from January to June, up 90 percent from a year earlier.
The amount also exceeded the P48.7-billion midyear program by 52.5 percent.
“Project loans also increased by 90.0 percent from the previous year, driven by the continued implementation of infrastructure and social welfare programs under the ‘Build-Better-More Program,’” the DBCC said in its latest midyear report.
Project loans are foreign borrowings tied to specific projects, mostly for infrastructure.
Broken down, the Japan International Cooperation Agency provided the biggest share of project financing at P35.1 billion. Of this, P15.4 billion was allocated to the second tranche of the Department of Transportation’s (DOTr) Metro Manila Subway Project (Phase 1), while another P9.4 billion went to the North-South Commuter Railway Project.
The Asian Development Bank (ADB) followed with P18.1 billion, including P6.8 billion for the second tranche of the Malolos-Clark Railway Project and another P6.8 billion for the first tranche of the South Commuter Railway Project, both under the DOTr.
The International Bank for Reconstruction and Development (IBRD) accounted for P15.1 billion.
Program loans
Meanwhile, program loans, which are broader foreign financing for government programs and policy reforms, remained much larger than project loans at P156.2 billion.
This, however, was down 8.8 percent from a year earlier and 3 percent below the P161.1-billion program for the period.
“Program loans were lower and below target as the government tapped more project loans for the first semester to accelerate infrastructure development,” the DBCC said.
ADB accounted for the bulk of program loans at P76 billion, followed by IBRD with P62.2 billion and Agence Française de Développement with P14.2 billion.
The increase in project-loan disbursements helped push total gross external borrowings to P544.8 billion in the first half, 35.4 percent higher than a year earlier and nearly 4 percent above the P524.1-billion program.
For the full year, the government programmed P97.35 billion in project loans and P403.8 billion in program loans.
