NEDA approves $250-M loan from Asian Devt Bank
abs-cbnNEWS.com | 10/23/2008 3:39 PM
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The board of the National Economic and Development Authority (NEDA) has approved a $250 million loan from the Asian Development Bank (ADB) that will partly help plug the government's budget deficit.
NEDA said the loan, which forms part of the development policy support program between the government and the ADB, was also approved by the central bank on October 9.
"The program is second of a cluster of three subprograms. It focuses on supporting fiscal policy sustainability and strengthening governance in public expenditure management and procurement," the NEDA said.
The first subprogram was intended for the core areas of fiscal consolidation and was signed and disbursed in February last year, it added.
For the first nine months of the year, the government incurred a fiscal deficit of P53.4 billion as spending surged under its plans to spur growth to shield the economy from the global credit turmoil.
The Philippines is targeting a deficit of P75 billion for 2008 but this may still drop to about P50 billion if planned asset sales were successful.
Meanwhile, the NEDA board also gave the go signal for a P1.72 billion credit line for an energy efficiency and climate protection program that state-run Land Bank of the Philippines proposed.
The said program seeks to support initiatives and projects in the area of energy efficiency and climate protection nationwide.
"Specifically, it aims to lower annual carbon dioxide emissions equivalent to 24 million tons by using alternative sources of energy," the NEDA said.
Of the total amount, P1.38 billion will be borrowed from German lender KfW while P344.3 million represents Land Bank's equity in the credit line, which will be implemented from 2009 to 2012.
Economic Planning Secretary and NEDA director general Ralph Recto said the climate protection program will be available to private companies that are at least 70 percent Filipino-owned as well as to local government units, national government agencies, and government-owned and controlled corporations.
"This credit line can be availed even by small to medium companies because it has no limitation in terms of asset size," noted Recto.
Land Bank listed potential recipients of the credit line as the Cotabato Sugar Central Corp, Davao Sugar Central Corp, Philcan Industrial Corp, the provincial government of Ifugao, and the municipal government of Dinapigue, Isabela.
The Ifugao provincial government and the town of Dinapigue produce power from renewable energy sources.
The sugar factories, on the other hand, use bagasse, the biomass remaining after sugarcane stalks are crushed to extract their juice, as an alternative fuel source for sugar mills. Biomass fuel reduces the emission of greenhouse gases, making the projects eligible for the credit line.
