JBIC to co-finance WB loan to RP

The Japan Bank for International Cooperation (JBIC) is keen on co-financing with the World Bank (WB) government proposed $200-million Public Finance Strengthening Project (PFSP).

Finance Undersecretary Juanita Amatong said JBIC recently expressed its willingness to co-finance the PFSP that is supposed to replace the $400-million Public Sector Reform Loan (PSRL) which government cancelled earlier.

"If the deal pushes through, both agencies will be putting in the same amount which means government can raise a total of $400 million," said Amatong.

Amatong said government expects negotiations to be completed within the year.

Originally, the PSRL was supposed to also replace the $400-million Banking Sector Reform Loan (BSRL), which expired last June. Government decided not to pursue its renewal after failing to comply with the loan’s conditionalities.

Amatong said government is still pushing for the $400-million loan but will be pursuing it in phases.

Previously, she said conditions attached to Phase I of the PSFP will involve reforms in budget management and procurement procedures, among others, which should be easy to comply with since government is already implementing most of the recommended measures.

Sources said government expects WB to approve the loan within six months and the single tranche should be released after the loan is signed.