ADB: $500-million loan okayed for PH's financial management reforms

The Asian Development Bank (ADB) on Wednesday announced the approval of a $500-million policy-based loan aimed at supporting the Philippines in pursuing its public financial management (PFM) reforms.

In a statement, the ADB said the $500-million Public Financial Management Reform Program (Subprogram 1) would "improve national budget frameworks, empower local governments, and establish a PFM system in the country’s Bangsamoro Autonomous Region in Muslim Mindanao (BARMM)."

The program would lay "the foundation for strengthening PFM systems to foster private sector participation in public investments and address climate change."

"This new program signifies the Philippine government’s commitment to building an open government founded on the principles of efficiency, transparency, accountability, and good governance,” ADB Philippines Country Director Pavit Ramachandran said.

"The program not only strengthens the efficiency and transparency of public funds but also promotes private sector roles in public services, as well as climate resilience and preparedness for Filipinos,” said Ramachandran.

The ADB said the policy-based loan program is anchored in the government’s PFM Reforms Roadmap 2024?2028, developed in partnership with ADB and endorsed by President Ferdinand R. Marcos Jr. 

Under the PFM roadmap, the Philippines aims to include the digital transformation of PFM systems and the creation of an enabling regulatory framework for public-private partnerships.

The Manila-based multilateral lender said the program would also promote fair and effective devolution of public services under the Mandanas ruling and foster local investments in climate resilience and disaster preparedness. 

The Mandanas ruling mandates that all national taxes and other taxes and fees collected by the national government be considered when computing revenue allotments to local government units.

The ADB said the program, likewise, fosters peacebuilding in BARMM, recognizing that fiscal autonomy and accountability underpin trust between the Bangsamoro government and its citizens. 

"It supports the Bangsamoro government’s own PFM systems, including local governance, budgeting, and revenue frameworks," the lender said. —NB, GMA Integrated News