The Asian Development Bank (ADB) will help stabilize the power situation in the Philippines through a loan of 450 million U.S. dollars, an ADB report said Friday.

The funds will assist the Philippine Government in restructuring the power sector, considered crucial to improving the country's fiscal imbalance and investment climate, said the report.

"Without a stable and reliable electricity supply, industry will not grow and generate the employment needed to decrease poverty," said ADB Vice-President C. Lawrence Greenwood. "The country could be facing power outages, decreased economic growth and higher electricity rates if the reforms envisioned under this program are not pursued."

The Power Sector Development Program will help restore the financial viability of the power sector, which currently is burdened by high levels of debt. Specifically, the funds will support the Government's absorption of the National Power Corporation's long-term liabilities.

The ADB program will assist the Philippine government in its ongoing efforts to privatize government-owned power systems, and introduce a competitive electricity market, which will reduce the burden on the Government and decrease unsustainable subsidies to the power sector. These reforms could help avert a major fiscal crisis and will free up financial resources for social services and infrastructure.

Source: Xinhua