BSP approves 230M worth of infra loans

The Bangko Sentral ng Pilipinas (BSP) has approved nearly €230 million worth of infrastructure loans of the National Government from the Spanish bank, BNP Paribas as the Arroyo administration pushes its pump-priming spending to head off the global economic slowdown.

BSP Governor Amando M. Tetangco Jr. told reporters that the Monetary Board has approved the loans in principle which would finance part of the President’s Bridge Program where they would be implemented in agrarian reform areas.

Tetangco said BNP Paribas would lend the Japanese yen equivalent of €195 million which would have a 13-year maturity inclusive of a three-year grace period and another yen equivalent of €34 million with 6.5-year maturity and 1.5-year grace period.

But Tetangco said the loan has the strict provision that bridges would be funded “only if they were connecting existing roads” which apparently was not a previous requirement.

Tetangco said some of the previous bridge projects that have been funded out of National Government loans were stand-alone bridges that do not connect roads together.

“So now the condition in these loans is that if there is no pre-existing road, the bridge funding would not be granted,” Tetangco said. “The road has to be pre-existing.”

According to Tetangco, the agrarian reform bridges project would be implemented by the Department of Agrarian Reform with the national government as the borrowing entity.

Tetangco said the BSP also approved a $10-million loan from the World Bank’s International Bank for Rural Development (IBRD) to finance the Second Agrarian Reform Communities Development Project.

Tetangco said this would provide additional funding to complete the construction of about 22 small irrigation projects in agrarian reform areas nationwide.

Also approved in principle were two official development assistance (ODA) loans, one from the Kreditanstalt für Wiederaufbau (KfW) Bankengruppe, a German government-owned development bank, based in Frankfurt.

KfW had agreed to extend loans of up to €10 million (approximately $12.8 million) for third phase of the Provincial and Town Water Supply and Sanitation Program.