South Korea puts up $3 billion funding facility for Philippines

MANILA, Philippines — The South Korean government is establishing a $3-billion funding facility for the Philippines, as well as a P13-billion loan agreement for the construction of a new Dumaguete Airport.

During the Kapihan sa Manila Bay forum yesterday, Finance Secretary Ralph Recto said he signed financing agreements with the Export-Import Bank of Korea (KEXIM) that would boost infrastructure projects in the country.

These include the $3-billion Economic Development Promotion Facility (EDPF) and the P13-billion Dumaguete Airport Development Project.

The bigger EDPF will serve as an additional financial bridge that will fill the gaps in the government’s flagship Build Better More infrastructure program.

As an independent official development assistance agency, KEXIM is mandated to operate and manage the EDPF including identifying pipeline projects, loan approval and signing loan agreements.

Among the projects being considered for possible funding assistance under EDPF are the Panay-Guimaras-Negros Island Bridges, the Consolacion-Liloan Bypass Road Project, the Lapu-Lapu Coastal Road Project and the Pampanga Integrated Disaster Risk Reduction and Climate Change Adaptation Project Phase II.

“These infrastructure projects will not only enhance mobility, but improve the lives of Filipinos by creating more jobs and businesses, boosting incomes, uplifting lives and reducing poverty,” Recto said.

The individual financing of projects to be lined up under the EDPF will carry an indicative interest rate of 1.2 percent to be repaid in 25 years, inclusive of a seven-year grace period.

On the other hand, the Dumaguete Airport project is expected to enhance the country’s capacity to welcome more tourists post-COVID.

The airport, which covers 197.55 hectares, is seen accommodating up to 2.5 million passengers per year from just 800,000, both from domestic and international flights.

The airport has a total cost of P17.06 billion, of which P13.15 billion will be financed by KEXIM and the remaining P4 billion by the Philippine government.

The project carries concessional terms, with interest rates of 0.05 percent per year for non-consulting services and zero percent for consulting services, to be repaid in 40 years, inclusive of a 10-year grace period.

“The necessity for a bigger and more modern airport is undeniable, especially considering that Negros Oriental currently has only one major airport,” Recto said.