RP eyes $616.6-M ODA from Japan

Unable to bankroll its own development program, the Arroyo administration is asking for $616.615 million worth of official development assistance (ODA) from Japan. Negotiations enter the final stages this week.

The assistance will come under the Japanese government’s 26th yen loan package, an annual development assistance facility that has been one of the country’s major source of development funds.

Last year, the Philippines was granted $566.84 million under the 25th yen loan facility and this was used in various development projects particularly social services, education and environment projects.

President Arroyo is scheduled to arrive in Tokyo today to discuss trade, financing and investment issues with Japanese prime minister Junichiro Koizumi but an economic team led by Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura and Finance Secretary Jose Isidro Camacho arrived over the weekend, ahead of the official party.

According to sources privy to the preparations for the state visit, the 26th yen loan would be one of the major talking points during the state visit, concluding earlier negotiations when the Japanese government sent a delegation to the country to discuss the projects to be funded by the facility next year.

In October, the source said the government submitted a list of 12 critical infrastructure projects, estimated to cost P33.246 billion or roughly $616.6815 million.

Of the 12 projects, the source said, nine would fall under the administration of the Department of Public Works and Highways.

According to the source, Philippine Ambassador to Japan Domingo Siason had already reported that only eight out of the 12 projects have been approved for financing by the Japanese government.

Documents obtained by reporters show that the projects include the Central Mindanao Inter-regional Circumferential Road project which would involve the rehabilitation of about 129.65 kilometers of national roads as well as the construction of five new bridges and the reconstruction of five existing bridges.

The list also includes the construction of arterial road links in Cavite-Batangas area, Iligan, Bukidnon, Palawan and Leyte as well as the expansion of the five-kilometer Urdaneta bypass road in Pangasinan.

The yen loan was also earmarked to finance the Agno River Integrated Irrigation project intended to improve the irrigation system covering about 70,800 hectares of irrigated farms in Pangasinan and Tarlac.

This portion will also include the repair of existing diversion weir, construction of a re-regulating pond, canal and siphon.

The source said the Japanese government has assured the Philippines of its "sustained support" along the lines of its development assistance policy in the country.

Japan is the country’s biggest source of ODA and one of three major sources of borrowing.

Aside from seeking development financing, the Arroyo administration said it was also keeping its options open on the possibility of issuing yen bonds to help finance its 2003 deficit.