The Philippines will borrow $300 million from the World Bank to embark on a digital transformation program, bringing the total amount of loans to be sought under President Marcos to $2.14 billion so far.
The latest documents from the World Bank have shown that the proposed funding for the Philippines’ first Digital Transformation Development Policy aims to catalyze “private investment for inclusive economic recovery through digital transformation.”
Finance Secretary Benjamin Diokno wanted, among other things, to boost government revenue by improving tax administration through digitalization to bring the budget deficit down to pre-pandemic levels equivalent to around 3% of gross domestic product by 2028 .
The president and his chief economic director had been resistant to new or higher taxes, as proposed by former president Duterte’s economic team, to pay off debts incurred during the ongoing pandemic and reduce the record deficit caused by large government spending to fight COVID-19.
This new addition to the World Bank’s lending pipeline for the Philippines was expected to be approved in fiscal year 2024, which begins in July next year.
A total of 12 projects with a combined value of $2.14 billion in low-interest concessional loans will be submitted for review by the Washington-based lender’s board of directors under the Marcos Jr administration.
Documents from last May showed that the World Bank would lend the Philippines in December this year $200 million for the second financing of the Financial Sector Reform Development Policy aimed at “achieving a resilient, inclusive and sustainable financial sector.” “.
“The financial system, although smaller than the financial systems of its Asian peers, has overall withstood the impact of COVID-19, but it faces downside risks due to the strong interconnectedness with non-financial businesses. and volatile external conditions,” the World Bank said.
—Ben O. de Vera
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