Japan extends $100-million loan to RP

MANILA, Philippines - Japan has extended a $100-million official development assistance to the Philippines to finance the government’s fiscal reforms and anti-corruption programs for this year.

The loan agreement was signed by Finance Secretary Margarito B. Teves and Norio Matsuda, the Philippine Office Chief Representative of the Japan International Cooperation Agency (JICA).

The loan agreement was for the Second Development Policy Support Program (DPSPII) amounting to ¥9.293 billion, equivalent to about $100 million.

DPSP (II) would be the first Official Development Assistance (ODA) loan to the National Government (NG) from the Japan International Cooperation Agency (JICA) this year.

The program was a joint-undertaking by JICA and the Asian Development Bank (ADB) which had also committed to finance part of the total cost estimated at $350 million.

According to the Department of Finance, it would also be among the earliest programs that materialized the commitment of Japanese Prime Minister Taro Aso to address the world economic crisis by extending ODA worth ¥1.5 trillion (about $17 billion) to Asia.

Aso made this commitment during the Annual Meeting of the World Economic Forum held in January 2009 in Davos, Switzerland, saying that Japan intended to infuse liquidity into the global system by increasing aid.

The program was intended to improve the country’s fiscal and macroeconomic stability; governance in public expenditure management and anticorruption; investment climate and infrastructure; and delivery of public services to the poor.

Through the program loan, the DOF said the National Government intended to support the budgetary requirements of its critical infrastructure and social projects and programs.

“More importantly, the ODA loan is a manifestation of the commitment of the Japanese government to support the Philippines weather the challenges of the current economic crisis,” Teves said.

The loan has a maturity of 30 years (inclusive of 10 years grace period) and carries an interest rate of 1.4 percent per annum.

Also this year, the government is waiting for the approval of other Japan-funded loans amounting up to P34.241 billion that would be included in the 27th Yen Loan Package.

Data from the National Economic and Development Authority (NEDA) showed that these loans included the P20.12-billion Infrastructure Logistics Assistance Facility, or the Logistics and Infrastructure Assistance Facility (Linaf); the P4.521-billion Project on Forestland Management (ProFORM); and the P9.6-billion Support Program for Agri-Enterprise Development (Spaed).

The Linaf and the Spaed would be implemented by the Development Bank of the Philippines, while the ProFORM would be implemented by the Department of Environment and Natural Resources (DENR). — With Pia Lee-Brago