MANILA, Philippines - The Monetary Board has approved the $336-million loan of state-run Development Bank of the Philippines (DBP) to bankroll infrastructure and support systems for the Strong Republic Nautical Highway program of the Arroyo administration.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said in an interview with reporters that the loan is equivalent to ¥30.30 billion and is under the 27th Yen loan package from the Japanese government.
Tetangco said the loan package would be extended by the Japan International Cooperation Agency (JICA) and would be payable over 30 years, inclusive of a 10-year grace period with an interest of 1.4 percent.
Proceeds of the loan package, he explained, would be used to bankroll the Logistics Infrastructure Development Project (LIDP) being undertaken by DBP.
LIDP is an investment financing facility that can be accessed by private corporations, government-owned and controlled corporations (GOCCs), and local government units (LGUs) to finance infrastructure and support systems for the Strong Republic Nautical Highway, particularly access or toll roads, bulk grains highway, and cold chain highway.
The project promotes the development of national distribution infrastructure in line with efforts to encourage economic growth. It provides medium- and long-term financing to build distribution infrastructure for local communities and the private sector.
Eligible projects include facilities for roll-on roll-off (ro-ro) terminal system including vessels, toll roads, local government roads and maintenance equipment.
The soft loan packages would come from the multi-billion-dollar facility Japan has committed to help developing countries in Asia cope with the effects of the global financial crisis.
The Philippines has adopted the policy of tapping more official development assistance (ODA) loans than foreign commercial borrowings to save on cost. ODA loans charge much lower interest rates than commercial loans.
The MB earlier approved the $163-million Agricultural Credit Support Project (ACSP) of state-owned Land Bank of the Philippines which was also part of the 27th yen loan package.
ACSP would make available short, medium and long-term funds to address the credit needs of key agribusiness players. It is expected to benefit 43,000 farmers and fishers, 220 small and medium enterprises (SMEs), and 30 large agribusinesses in the first five years of implementation.
The project would also help finance some 43,250 sub-projects and create about 53,230 new jobs.