THE Asian Development Bank (ADB) approved a $500-million loan to help the Philippines carry out its public financial management (PFM) reform program.
In a statement on Tuesday, the Public Financial Management Reform Program (Subprogram 1) is expected to improve national budget frameworks, boost local government capacity, and establish a PFM system in the Bangsamoro Autonomous Region in Muslim Mindanao.
“This new program signifies the Philippine government’s commitment to building an open government founded on the principles of efficiency, transparency, accountability, and good governance,” ADB Philippines Country Director Pavit Ramachandran said in the statement.
Mr. Ramachandran said the project improves the use and transparency of public funds but also “promotes private sector roles in public services, as well as climate resilience.”
The financing package aligns with the PFM Reforms Roadmap 2024–2028, developed in partnership with the ADB and endorsed by President Ferdinand R. Marcos, Jr.
Among the roadmap’s main points are the digitalization of PFM systems and the creation of an enabling regulatory framework for public-private partnerships.
“The program promotes the fair and effective devolution of public services under the Mandanas ruling and fosters local investments in climate resilience and disaster preparedness,” the ADB said.
The ADB said the Supreme Court’s Mandanas ruling “mandates that all national taxes and other taxes and fees collected by the National Government be considered in computing revenue allotments to local government units.”
The project also supports the Bangsamoro government’s own PFM systems, including local governance, budgeting, and revenue frameworks.
The ADB, along with the Public Expenditure and Financial Accountability (PEFA) Secretariat and other development partners, will perform a PEFA Assessment to guide local PFM reforms. — Aubrey Rose A. Inosante