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WORLD> Global Aftermath
Philippines gets $250m ADB loan to weather global slowdown
(Xinhua)
Updated: 2008-10-01 16:36

MANILA  -- The Asian Development Bank (ADB) on Wednesday said it is extending a 250 million US dollars loan to strengthen the policy reform initiatives of the Philippine government for fiscal management, investment climate and social sectors.

The loan is the second of a three-part Development Policy Support Program (DPSP) aimed at helping the Philippines achieve its medium-term development goals, the Manila-based multi-lateral lender said in a press release.

ADB said the second loan would addresses challenges brought by recent global economic slowdown through greater flexibility in fiscal policy in 2008 and 2009, further enhancement in tax revenue collection, and support for the government's conditional and targeted cash transfer program.

ADB said the surge in commodity prices in early 2008, volatility in the US financial markets, and the economic slowdown in developed economies have negatively affected the Philippine economy, with a sharper-than-expected slowdown in GDP ( gross domestic products) growth and a spike in inflation to a 17- year high level in August.

Kelly Bird, an economist in ADB's Southeast Asia Department, said the Philippines has been able to weather external shocks due to the government's commitment to fiscal discipline and key reforms including tax reforms, the absence of fuel subsidies in the national budget, previous trade reforms and synchronized fiscal and monetary policies.  

The third DPSP loan is expected to be processed in 2009 and submitted for ADB Board consideration upon the completion of the second loan.

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