MANILA, Philippines - The Bank of the Philippine Islands (BPI) and the Development Bank of the Philippines (DBP) are co-financing the P560-million water rehabilitation project for Puerto Princesa in Palawan under the Philippine Water Revolving Fund (PWRF) program.
The PWRF is a public-private participation scheme wherein a government financial institution and a private commercial bank jointly undertake the financing of water and sanitation projects.
Under the co-financing deal, Puerto Princesa will be getting a term loan with a repayment period of 15-years. DBP will tap funds from the Japan International Cooperation Agency (JICA), while 85 percent of the BPI loan will be covered by a guarantee from the LGU Guarantee Corp. (LGUCC), a private third party guarantor and the United States Agency for International Development (USAID) Development Credit Authority.
Prior to the landmark public-private partnership deal, municipal water projects were mostly financed by overseas development assistance (ODA) funds and subsidies from the National Government.
The PWRF is an innovative scheme that aims to mobilize private capital to augment public resources for much-needed investments in water supply and sanitation. The initiative was actually launched by the Department of Finance Municipal Development Fund Office, DBP, USAID, JICA and LGUCC in 2007.
DBP president and chief executive officer Francisco F. Del Rosario Jr. said that there was a need to involve the private sector to pursue development in the countryside, as there was a huge investment requirement on water supply and sanitation.
“These water projects contribute to the initiatives being undertaken by the national government including one of the objectives of the millennium development goals which is access to safe and potable water,” Del Rosario added.
BPI chief operating officer Gil Buenaventura called it a “milestone” for the universal bank of the Ayala Group of Companies.
“I not only gives us a sense of accomplishment to have supported the water sector but also encourages us to expand and create new markets,” Buenaventura added.