WB to provide $50 million for rural financing
THE World Bank ( WB), the Development Bank of the Philippines ( DBP) and the Department of Finance on Thursday signed a tripartite loan agreement for a project designed to promote investments in local public infrastructure and services.
Approved by the WB Board of Executive Directors on December 1, 2011, this new $ 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.
DBP President Francisco Del Rosario Jr. said that the project builds on the bank’s existing suppor t for improved physical and economic integration through inter- modal systems, 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.
The inter-modal system includes the roll-on, roll-off network under the DBP’S Connecting Rural Urban Intermodal Systems Efficiently program.
“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,” del Rosario said.
DBP will on- lend the $ 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).
Wholesale loans
In addition to offering direct retail loans, DBP will also channel financing through wholesale loans to eligible private financial institutions for onlending to local service providers.
“RIGP shows the strong partnership we have with the World Bank. It is the first of the many initiatives we hope to work together with the Bank under the stewardship of Mr. Konishi as the new country director, as we continuously strive to reach our goal of fostering inclusive growth in the country,” Finance Secretary Cesar Purisima said.
He added that the program is designed to support investments in local public infrastructure.
“It will improve the physical and economic integration within and across LGUS in participating provinces and regions, particularly those areas recently damaged by the typhoons. It is indeed a timely response following the recent calamities,” he added.
Among the eligible projects for financing include disaster risk mitigation, environmental infrastructure, agriculture support systems, and social, transport and tourism support.
Meanwhile, WB Country Director Motoo Konishi, reiterated WB’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 fulfill and balance their mandate as local development managers and providers of basic services,” Konishi said.
He added that the World Bank recognized the potential impact of RIGP on growth and economic development since it helps in the provision of facilities that will promote accessibility, connectivity, economic opportunities and job creation, especially for lower income LGUS.