DEVELOPMENT BANK OF THE PHILIPPINES

Access to safe water is a fundamental human right. Unfortunately, hundreds of millions of people around the world still lack access to drinkable water. The conditions in the Philippines also remain dramatic. Over 16 million Filipinos continue to be deprived of clean water and the situation demands urgent action to tackle this very serious challenge. Addressing some of the pressing water issues require large amount of financial resources. According to estimates, about 2 billion Euros are immediately needed for the water supply and sewerage management systems in the Philippines.

In line with its mandate, the Development Bank of the Philippines which is a state owned development finance institution launched the Philippine Water Revolving Fund to provide financial resources to the sector.

The Development Bank of the Philippines (DBP) brought the private sector financial institutions on board and provided them an opportunity to actively participate and benefit from the water financing programs. This resulted in introducing market based approach and thereby it brought in the needed capital, innovation and the efficiency in managing the financial products, eliminated political obstructions as well as improved the planning and execution of the water supply and sewerage projects across the country. 

Another important aspect of the Philippine Water Revolving Fund is its co-financing feature which encourages the private sector banks to enter into the business of financing water projects. At the same time the Water Services Providers gained access to credit facilities that were affordable and had long payback periods. In addition, under the Philippine Water Revolving Fund program, the DBP arranged a credit risk guarantee to partially cover the risk of the commercial banks. This in turn further reduced the interest rates.

As a result of the above actions, DBP successfully managed to make water projects a part of the credit portfolio of private sector financial institutions giving boost to the water sector in the country. Through well-planned structure, DBP also managed to give Water Services Providers the access to affordable capital. 

As a leading development finance institution of the country, it is the mandate of DBP to provide financial resources for infrastructure needs of the country. The success of the Philippine Water Revolving Fund therefore made a major contribution in achieving the bank’s objectives. 

In addition, it helped in developing relationships with the private sector banks and also supported in capacity building of bank’s staff to manage large infrastructure programs.

The Philippine Water Revolving Fund also finances sanitation, sewerage and waste water management projects. It integrates comprehensive environmental policies in all its projects and thereby addresses the issues of water contamination and pollution. 

The major social contribution of Philippine Water Revolving Fund is that it gives access to clean water to those who have so far been deprived of this fundamental right.

In addition, to notable environmental and social benefits, the Philippine Water Revolving Fund also provides substantial economic benefits. It created employment opportunities, helped improve country’s infrastructure and also provided the private sector financial institutions new business opportunities
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