PHL seeking $400-M Chinese loan to fund digital transformation

THE PHILIPPINES is seeking a $400-million loan from Asian Infrastructure Investment Bank (AIIB) to fund upgrades to digital services in order to expand inclusion, the Beijing-based bank said.

“The project objective is to assist the government of the Philippines to foster an enabling environment for digital technologies to boost inclusive and resilient economic growth,” the bank said on its website.

The proceeds will fund improvements to digital government service delivery and develop competition-friendly infrastructure policy; expand financial inclusion for individuals and companies through digital finance; and boost the growth of digital service businesses.

“Aside from the economic contraction, the pandemic also resulted in significant social sector losses which mostly affected the poorest and most vulnerable. For the country to achieve an economic recovery that is resilient, and inclusive, there is a need to focus on new development drivers including digitalization,” the AIIB said.

The bank said digitalization has the potential to “increase productivity by reducing firms’ operational costs and allowing them to reap economies of scale.”

“Digitalization can increase the efficiency and transparency of government services and empower its constituents, especially those previously distant from the center of decision-making,” it added.

The funds will be drawn from the AIIB’s COVID-19 Crisis Recovery Facility and will be co-financed with the World Bank.

According to the AIIB, the project’s appraisal and final review will be conducted in the third quarter. — Luisa Maria Jacinta C. Jocson