Asian banks lend $750m to Philippines for Covid relief as economy stalls

The Asian Infrastructure Investment Bank (AIIB) and the Asian Development Bank (ADB) have offered a $750m loan to the Philippines to help it deal with the fall-out from the coronavirus pandemic.

Money will be used to boost the country’s testing capacity and cushion the economic impact of the virus on workers and SMEs.

DJ Pandian, the AIIB’s vice president, said: "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."

The move comes as the International Monetary Fund estimates that lockdown measures will cut six percentage points from the Philippines’ GDP this year, bringing it to less than 1%. And economic consultant Global Data estimates that the construction sectors’ output will grow 1.2%, rather than the 8% expected before the pandemic struck.

The Philippines declared a strict lockdown some 11 weeks ago. This is now beginning to be relaxed, with construction work in safer areas allowed to resume on 15 May. However, restrictions on non-essential work remain in the Manila, which has suffered about 66% of the archipelago’s infections and 72% of its deaths.

Last week, the AIIB and ADB loaned $250m to Bangladesh for Covid-19 support.

Image: Manila, capital of the Philippines (Vincent Go/Dreamstime)

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