The Asian Devel­op­ment Bank is lend­ing money to nations to help with their own eco­nomic stim­u­lus pro­grams, and the first such loan went the Philip­pines. $500 mil­lion dol­lars will be lent to the coun­try. The ADB started the pro­gram because many gov­ern­ments were hav­ing trou­ble rais­ing money as credit mar­kets have been very tight dur­ing the global reces­sion.

From the Penin­sula On-Line, reporter Roel Landin­gin tells us more details about the loan program.

The bank said it had received appli­ca­tions for more than the $3bn avail­able, with Bangladesh, Indone­sia, Kaza­khstan, Pak­istan, Sri Lanka and Viet­nam also request­ing help.

Bangladesh, like the Philip­pines, has asked for the max­i­mum $500m. The Inter­na­tional Mon­e­tary Fund is allo­cat­ing spe­cial draw­ing rights worth $735m to Dhaka to strengthen its for­eign exchange reserves amid the global down­turn, a fund offi­cial told Reuters yesterday.

The Philip­pines is strug­gling to fund its stim­u­lus mea­sures, which include labour-intensive infra­struc­ture projects and increased cash trans­fers, amid falling gov­ern­ment rev­enues and a widen­ing bud­get deficit. The econ­omy shrank 2.3 per­cent quarter-on-quarter in the January-March period and the gov­ern­ment sharply cut its full-year growth fore­cast in June to only just 0.8–1.8 per­cent, from the pre­vi­ous tar­get of 3.1–4.1 per­cent. Manila warned of the bud­get deficit reach­ing as much as 250bn pesos ($5.2bn), equiv­a­lent to 3.5 per­cent of gross domes­tic prod­uct, because of rev­enue shortfalls.

Yes­ter­day, the ADB said the new loan would “help close the government’s bud­get financ­ing gap for this year”.

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