The Philippines is eyeing to tap “asset recycling,” one of a dozen innovative financing models identified by the Asian Development Bank (ADB) that Manila can use to address infrastructure constraints.
INCHEON, South Korea—The Philippines is eyeing to tap “asset recycling,” one of a dozen innovative financing models identified by the Asian Development Bank that Manila can use to address infrastructure constraints.
“’Asset recycling’ means you take public assets, you basically privatize them or ‘PPP’ [public-private partnership] them, get money, use the money to pare down the debt so you decrease the government balance sheet,” Joven explained. “So, basically it’s just like a PPP; except that you also off-load the asset from your balance sheet. So it improves also [the] debt metrics.”
Meanwhile, the debt-to-nature swap—employed by Manila over three decades ago—is also making a comeback as one of the innovative financing models being eyed by the Asian Development Bank to address infrastructure backlogs in the region.THE debt-for-nature swap was implemented in the Philippines in 1988 when the World Wildlife Fund Inc. purchased the $390,000 debt of the country.
The report added that the total infrastructure investment needed for the Association of Southeast Asian Nations region is estimated at $2.8 trillion and $3.1 trillion , placing the annual-investment needs at $184 billion and $210 billion, respectively. “The arrangement enabled the central bank to retain the money in the country and utilize it for conservation projects,” the ADB said.
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