AIIB okays $750-M loan for PH’s Covid-19 response

THE Asian Infrastructure Investment Bank (AIIB) said on Friday it had approved a $750-million loan for the Philippines to help it “stave off the worst public health and economic effects of the Covid-19 (coronavirus disease 2019) pandemic.”

In a statement, the Beijing-headquartered multilateral lender said the loan — which was co-financed with the Asian Development Bank (ADB) — would go toward increasing Manila’s testing capacity; bolstering vulnerable sectors, including agriculture; and providing conditional cash transfers and emergency assistance to poor households.

At least 1 million micro, small and medium enterprises (MSMEs), of which 58 percent are registered to women, would benefit from wage subsidies, it added.

The new loan comes after the World Bank announced that it had approved a $500-million loan to help the Philippines mitigate the impact of the coronavirus pandemic on poor and vulnerable households, and to provide financial relief to MSMEs.

It also comes a day after the government announced that the modified enhanced community quarantine it imposed on Metro Manila since May 16 would transition to the more relaxed general community quarantine starting on June 1.

The Philippines has been under lockdown since mid-March to stem the spread of Covid-19, which first emerged in the city of Wuhan in China’s central Hubei province in December. From there, it spread to more than 200 countries and territories, infecting more than 5.8 million people, of which over 360,000 died, according to the latest tally from Johns Hopkins University on Friday.

“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 AIIB said in a statement.

This Oct. 24, 2019 photo shows the Asian Infrastructure Investment Bank’s headquarters in Beijing, China.

“The focus of our efforts is to help the government tackle the immediate health and economic challenges posed by the pandemic. The AIIB’s support will contribute to building economic resilience and ensuring quick recovery,” said D.J. Pandian, AIIB vice president for investment operations.

While the AIIB does not have a regular instrument for policybased financing, it said it was extending such funding under the Covid-19 Crisis Recovery Facility to support its members through projects co- financed with the World Bank or the ADB.

On April 17, the AIIB said it is doubling available funds under its Covid-19 crisis recovery facility to 10 billion U.S. dollars due to high client demand.

The decision came after requests for funding have substantially exceeded the $5 billion originally allocated for emergency relief, as clients require immediate assistance in areas that include health infrastructure and pandemic preparedness to alleviate health care pressures.

The AIIB is currently reviewing projects from its members.