The BSP’s Monetary Board approved the loans last week, one amounting to 400 million yuan from the Export Import Bank of China, equivalent to around $50 million.
BSP Governor Amando M. Tetangco Jr. said the loan proceeds would be used to finance the acquisition and operation of cargo inspection equipment for the Bureau of Customs (BOC).
Tetangco said the government was the borrowing entity but the BOC would utilize the funds for the acquisition of 10 non-invasive inspection scanners capable of scanning cargo without necessitating physical inspection.
Tetangco said the loan was highly concessional, carrying a two percent annual interest spread over a period of 20 years including a five-year grace period.
According to Tetangco, the BSP also approved a loan from Germany’s KfW Entwicklungsbank (KfW development bank) amounting to 15 million Euros, equivalent to around $18.2 million.
The Kfw loan would be used mainly for the government’s local government development program.
Tetangco said the fund would be relent to local government units through the Land Bank of the Philippines which had been selected as the conduit bank.
The Kfw loan is also a soft loan, carrying an annual interest of 0.75 percent spread over 40 years including a 10-year grace period.
Earlier, the BSP approved a loan from the KfW development bank which in 2004 had committed approximately euro 2.5 billion to promote developing and transition countries.
The KfW group is extending loans of up to Euro11.7 million for on-lending to participating financial institutions under the SME financing program.