Manila, Jan 19, 2006 AEST (ABN Newswire) - In response to a direct request from the Secretary of Finance, Asian Development Bank (ASX: ATB) ("ADB") will help the Philippine Government improve its debt and risk management through a technical assistance grant of US$720,000.
In the face of the country's large debt obligations and contingent liabilities, the TA will support the Government's fiscal consolidation program by establishing a process for a more effective monitoring and coordination of debt and risk management activities.
The size of the country's stock of debt and contingent liabilities, estimated at P5.8 trillion as of end-2003 or 137.5% of the country's GDP, makes prudent debt and risk management an essential component of any successful fiscal consolidation strategy for the Government.
The TA will develop a mechanism to monitor debt and contingent liabilities as well as a system to manage risk. This will allow the Government to identify, evaluate, quantify, and provide appropriate budget cover for debt obligations and risk exposure from contingent liabilities.
It will also boost the capacity of all core agencies and offices engaged in debt and risk management work, including the Bureau of Treasury, Corporate Affairs Group, and International Finance Group of the Department of Finance, as well as the National Economic Development Authority.
"ADB's Country Strategy and Program for the Philippines emphasizes fiscal consolidation as the highest priority goal of ADB support," says William Bikales, an ADB Principal Economist.
"The large fiscal burden of debt servicing, advances on guaranteed loans, and payment of guaranteed obligations under private sector participation contracts has squeezed out spending on essential government services and weakened investor confidence in the macroeconomic stability of the country."
The total cost of the TA is estimated at $1.05 million. The Government will contribute the balance of $330,000 equivalent in the form of office space, staff support, and other items. The Department of Finance is the executing agency for the TA, which will be carried out over 12 months beginning March 2006.
Contact
Rita Festin
Email: rfestin@adb.org
Tel:+ 632 683 1006; + 63917 8884949
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