DoF Undersecretary Gil Beltran said the fiscal strengthening loans are already part of the cast of assistance programs granted by the World Bank.

"The size of the loan varies (depending) upon the (fiscal) development. We are looking at how it would work, how much we need etc.," Beltran explained. The loan amount depends on the fiscal performance. If the fiscals show positive numbers, the loans will be adjusted higher to complement fiscal improvements.

Beltran said the fiscal strengthening loan is part of the package of new loans being negotiated with the World Bank.

The DoF wants higher and longer-term loan worth from the World Bank. In fact it is presently preparing for a $ 303.5 million loan for the healthcare and education sectors this year.

This is $ 200 million for the government’s education programs and $ 103.5 million for healthcare. The loan will carry longer maturity of 25 years and lower interest rates of 5.5 percent compared to commercial rates of 7.5 percent.

The DoF and the World Bank are working out details for both loans, which includes among others, technical assistance grants in aid of the Arroyo administration’s Millennium Development Goals or MDGs and a $ 40 million grant for healthcare.

The World Bank has indicated it will raise its annual loans as soon as reform measures show positive impact on the fiscal situation. In a previous interview, the bank’s country manager Joachim von Amsberg said that if reforms were implemented they would support the government with "larger commitments."

The National Government is planning to negotiate more funding assistance and low-interest rate loans from multilateral agencies such as the World Bank to limit commercial borrowings abroad. For 2006 the borrowing program is $ 4 billion. This is $ 3.1 billion commercial loans and $ 900 million official development assistance or ODA loans. Last January the NG sold $ 2.1 billion of ROPs.

At the Philippine Development Forum last week, international donors urged the Philippines to now now address critical gaps in its infrastructure and social services spending after having averted a fiscal crisis in recent years,

The donors — which include multilateral lenders such as the WB and the ADB and foreign governments such as Japan, the United States, and the EU — acknowledged that the country’s fiscal situation improved last year, but that more needs to be done.

"Fiscal reforms have moved the country away from the acute risk of crisis to a virtuous cycle of fiscal reform and restored market confidence," said Joachim von Amsberg, World Bank country director for the Philippines and co-chair of the meeting, in his closing remarks.