The Asian Development Bank (ADB) will be extending a $50-million loan to the Philippines this year to address the health care needs of poor Filipinos in rural areas.

Called the Better Health Care project, the ADB loan will be spent for the construction of new public health centers and provide advanced equipment to existing facilities--particularly on maternal and child health care services--to help them qualify for higher accreditation and increased financing from the Philippine Health Insurance Corp. (Philhealth).

It will also provide financial support to small private health providers such as midwifery clinics, diagnostic facilities and community drug stores to provide accessibility to rural communities. The project also aims to outsource services and establish private insurance schemes to provide funds for capital investment.

The loan has a 25-year repayment term, which includes a six-year grace period and an interest rate determined in accordance with ADB London's interbank offered rate-based lending facility.

It will be coursed through the Sustainable Health Care Investment Program, a credit facility established by the Development Bank of the Philippines to support Fourmula One for Health, the government's health sector reform agenda.

The Sustainable Health Care Investment Program has two windows. The direct retail lending window is for local government units (LGU) and larger private sector borrowers such as health providers, foundations, and health maintenance organizations, with project costs at a range of $100,000 and $5 million.

On the other hand, the wholesale lending window is for accredited financial intermediaries such as microfinance institutions, rural banks, and thrift banks, where small private firms can borrow from $100,000 to $500,000.

"In addition to direct benefits resulting from this investment, the project will trigger increased LGU and PhilHealth spending on health," explained Vincent de Wit, ADB's Principal Health Specialist for the Southeast Asia Department.

The high cost of medicines has primarily led to lower demand for health services among the poor and vulnerable groups, with 30 to 40 percent of the population having a hard time paying for medicinal expenses.

On Tuesday, the ADB has allotted $600,000 to help the government improve its electronic procurement system.