ADB engages 500 million dollars in loans in the Philippines and in India

|News|13 October 2023

ADB's loan to Philippines and India, copyright ADBThe Asian Development Bank (ADB) has recently approved two different loan schemes to support on one side its Inclusive Finance Development Programme in the Philippines and on the Indian side the Assam Integrated Flood and Riverbank Erosion Risk Management Investment Programme. Two diverse areas of interest in which the Bank gives support to the population of these countries.

ADB’s Inclusive Finance Development Programme 

The 300 million dollar policy-based loan that ADB devoted to support the Philippine government is part of the Bank's Inclusive Finance Development Programme co-financed by the Asian Infrastructure Investment Bank, to be more precise of its Subprogramme n. 3, which came after Subprogramme 1 and Subprogramme 2 delivered in October 2018 and August 2020, respectively. 

The Programme aims at supporting reforms to expand financial inclusion in the country by improving the country’s financial infrastructure, including widening the digital financing ecosystem. It grows in fact from necessity. 

According to the 2021 Global Findex Database, “the number of Filipino adults holding an account with a financial institution or mobile money provider has risen from 34% of the population in 2017 to 51% in 2021. Hastened by the COVID-19 pandemic lockdowns, the Philippines nearly doubled the number of financial institutions or mobile money accounts for the bottom 40% of the population by income from 18% in 2017 to 34% in 2021". 

By 2024, the government wants to raise the number of Filipinos holding an account with financial institutions or mobile money providers to 70%, aided by streamlined requirements with the Philippine Identification System (PhilSys). Key reforms pursued by the government to eliminate barriers to access financial services and mainstream gender across its policies include updating and providing action plans for the National Strategy for Financial Inclusion 2022–2028.  

To contribute to this goal, this programme also supports efforts to increase the capacity of financial service providers, including rural banks and non-bank financial institutions, to offer quality products and services accessible through various delivery channels.

Reforms pursued under this loan will then complement other ADB programmes in the Philippines, such as the Competitive and Inclusive Agriculture Development Program - Subprogramme 2 approved in January 2023.

Climate Resilient Brahmaputra Integrated Flood and Riverbank Erosion Risk Management Project in Assam

The second loan announced - worth up to 200 million dollars - aims at enhancing the management of flood and riverbank erosion risks along the primary 650-kilometer stretch of the Brahmaputra River in Assam, India.

This initiative builds upon the achievements and insights derived from the ADB's previous funding of the Assam Integrated Flood and Riverbank Erosion Risk Management Investment Programme, which took place from 2010 to 2020, as well as comparable investments in Bangladesh. Its objective remains addressing the ongoing challenges posed by recurrent flooding and the persistent erosion of the Brahmaputra River's banks.

The project's approach is characterized by a comprehensive, integrated, and risk-informed strategy designed to expand investments in managing flood and riverbank erosion risks, while also focusing on long-term planning. It places increased emphasis on supporting climate and disaster resilience, as well as food security. 

Additionally, the project seeks to leverage co-benefits and empower women through activities that enhance disaster resilience and economic opportunities. Ultimately, this undertaking is expected to benefit approximately one million individuals and boost crop production across 50.000 hectares.

“By stabilizing 60 km of banks, installing 32 km of pro-siltation measures, and building 4 km of climate-resilient flood embankments in five high-priority districts (Dibrugarh, Goalpara , Kamrup Rural, Morigaon, and Tinsukia), the project will secure living spaces, support livelihoods, create employment opportunities, and ultimately enhance the navigability of the river. It will advance the institutional capacity in flood forecasting and warning systems, modern surveys, erosion and embankment breach modeling, asset management, flood risk mapping, land use planning, and pilot nature-based solutions and the graduation approach”.