Central bank OK's $655-M loans for fiscal boost

The Bangko Sentral ng Pilipinas (BSP) has approved $655 million worth of official development assistance loans from multilateral institutions in support of fiscal consolidation and social welfare projects, official documents showed. The Japan International Cooperation Agency (JICA) is providing $150 million to a program that seeks to support fiscal sustainability and improve the government's creditworthiness, according to central bank documents obtained by reporters over the weekend. The Asian Development Bank (ADB) will also extend a $100-million loan for the same project. Another $405 million loan will come from the World Bank's International Bank for Reconstruction and Development to support the conditional cash transfer program for the poor. It will be used to finance the Social Welfare and Development Reform project of the Department of Social Welfare and Development, involving cash transfers to poor families. BSP Deputy Governor Armando L. Suratos told reporters on Friday the JICA and ADB loans would finance the third phase of the development policy support project. Suratos said this project specifically aims to enhance governance in public financial management and speed up disbursement for key public expenditures. Finance officials were not immediately available for details. JICA's Web site showed that among the thrusts to be funded under the project are: • establishment of a public debt and risk management unit; • making substantial progress in cleaning up the corporate taxpayers database and encoding the backlog of tax registration and tax return files; and • improving the currently cumbersome procedure of issuing tax refund certificates; • development of an integrated expenditure management system; • posting bid notices and results of procurement auctions by all 15 departments and agencies on the government's procurement Web site; and • enhancing the drive against tax evasion and smuggling. The first phase of the project was implemented in 2006-2007, while the second phase was undertaken in 2008 to 2009. — Reuters with Don Gil K. Carreon