File photo of Asian Infrastructure Investment Bank. [Photo/Sipa]
MANILA - The Asian Infrastructure Investment Bank (AIIB) on Friday said it has approved a $750 million loan to help the Philippines "stave off the worst public health and economic effects of the COVID-19 pandemic."
Co-financed with the Asian Development Bank (ADB), the AIIB said the budgetary support will go toward increasing the government's testing capacity, bolstering vulnerable sectors, including agriculture, and providing conditional cash transfers and emergency assistance to poor households.
The AIIB said at least 1 million micro, small and medium-sized enterprises, of which 58 percent are registered to women, will benefit from wage subsidies.
The Philippines imposed a lockdown in mid-March to halt the spread of the virus.
"The lockdown measures are expected to take a heavy toll on the country's economic growth with the International Monetary Fund (IMF) estimating that gross domestic product could see a sharp contraction from 6.2 percent to 0.6 percent for 2020," the AIIB said in a statement.
"The focus of our efforts is to help the government tackle the immediate health and economic challenges posed by the pandemic. AIIB's support will contribute to building economic resilience and ensuring quick recovery," said AIIB Vice President, Investment Operations, D.J. Pandian.
While AIIB does not have a regular instrument for policy-based financing, the AIIB said it is extending such financings on an exceptional basis under the COVID-19 Crisis Recovery Facility to support its members through projects co-financed with the World Bank or the ADB.
On April 17, AIIB said it is doubling available funds under its COVID-19 crisis recovery facility to 10 billion U.S. dollars due to high client demand.
The decision came after requests for funding have substantially exceeded the 5 billion dollars originally allocated for emergency relief, as clients require immediate assistance in areas including health infrastructure and pandemic preparedness to alleviate health care pressures.
AIIB is currently reviewing projects from its members.
The AIIB is a multilateral development bank with a mission to improve social and economic outcomes in Asia.