France grants 150 million euro loan for developing LGU finances

The French government has granted a P9.3-billion (150 million euro) loan to the Philippines to improve the country’s machinery of local government, its Manila embassy said Tuesday in a statement. The loan, packaged as Local Government Financial and Budget Reform Program, subprogram 2 (LGFBR-2), aims to help improve efficiency and effectiveness in delivering basic public services to communities by increasing fiscal resources and financing options for local government units (LGUs), the French Embassy said. The funding is expected to help enable the LGUs to enhance their capacities to plan and budget for the basic needs of their constituent communities in a transparent and accountable way. According to the embassy, the program’s focus is on the following areas: “intergovernmental fiscal relations; fiscal management, planning and public expenditure management; performance measurement and service delivery in credit financing; and local own sources revenues." Based on the said “key reform areas," the program is expected to ensure that local government shares in national revenues are more complete, more timely and more transparent, and to “deepen reforms in fiscal management." It is also expected to make the delivery of critical public services at the local level more effective and transparent; improve local government access to sources of capital; and reduce local government dependence on Internal Revenue Allotments, the embassy said. The loan, co-financed by the Agence Francaise de Developpement (AFD) and Asian Development Bank (ADB), has a maturity of 20 years including a five-year grace period. Finance secretary Margarito Teves signed the loan agreement with AFD Director of Asia Department, Martha Stein-Sochas, and Ambassador Thierry Borja de Mozota for the government of France. AFD is France’s bilateral development finance institution, and also its main development agency that implements the EU member-nation’s development aid policies in the Philippines.—JV, GMANews.TV