On Friday, May 6, 2022, the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) and the Agence Française de Dèveloppement (AFD) hosted the Intermediate Finance for Local Government Unit Reinforcement webinar in the Philippines. Both have inked cooperation in 2020 to expand the skills of ADFIAP members and thereby confirm the position of development banks as a major player in financing development and the SDGs for the 2030 Agenda and in order to give banks partners of ADFIAP the opportunity to benefit from AFD’s experiences.
The year 2022 will be a watershed moment for the Philippines’ Local Government Units (LGUs), as they will receive a larger share of national internal revenue taxes as a result of the recent Mandanas Ruling Supreme Court decision, as well as additional executive branch functions of Executive Order No. 138. Both legislations support the Philippines’ decentralization policy, which is becoming increasingly important in the face of climate change challenges and the need to address community issues. As a result, LGUs are gaining traction in the areas of climate adaptation, gender equality, inclusion, and environmental issues. These policy improvements will improve LGU’s creditworthiness and help them establish a reputation as legitimate and trustworthy institutions capable of developing long-term, inclusive projects that benefit the public.
Financial intermediation has been used by AFD to finance local governments. Providing financial assistance to development banks is, in fact, a direct route to the implementation of programs that improve access to resources tailored to the needs of public and private actors involved in territorial development.
Annie Tran, AFD’s Regional Senior Investment Officer in Asia, Clément Larrue, AFD’s Regional Urban Development Task Team Leader, and Mathilde Moulinou, AFD’s Regional Urban Development Officer, presented and discussed AFD programs with Findeter in Colombia, BDMG in Brazil, CPSCL in Tunisia, and the FEC in Morocco. These programs enable municipalities to achieve their budget demands while also multiplying projects with positive environmental and social outcomes.
Executives and senior officers from the Development Bank of the Philippines, Al Amanah Islamic Investment Bank of the Philippines, Small Business Corporation, Philippine Guarantee Corporation, New Rural Bank of San Leonardo, CARD Mutually Reinforcing Institutions, Resource Environment and Economics for Center Studies (REECS), AFD, and ADFIAP officers participated in the webinar.