DBP drops lending rates by one percent for Ro/Ro shipping loans

The Development Bank of the Philippines (DBP) has reduced interest rates on shipping loans under the Road RORO Terminal System (RRTS) from 8.5 percent to 7.5 percent for missionary routes, and from 9.5 percent to 8.5 percent for commercial routes, fixed for the first three years.

After the Strong Republic Nautical Highway (SNRH) conferences held in Cebu and Makati recently, DBP president and chief executive officer Reynaldo G. David decided towards the policy shift.

"The bank is continuously looking for ways to encourage more investments in the RRTS under its Sustainable Logistics Development Program (SLDP), one of DBP’s priority programs.

This is also part of our commitment to speed up development initiatives in the countryside," David added.

He, however, reiterated the need to retain the international classification of vessels in order to ascertain the structural and mechanical fitness of ships.

This, he added, is critical in ensuring the quality of the vessels and the safety of passengers in accordance with the global standards of a modern shipping industry.

The essence of DBP’s lending program for the shipping sector is to modernize and promote the safety of vessels in the domestic fleet.

David emphasized that while DBP is working closely with the Maritime Industry Authority (Marina) in improving vessel inspection policies, the international class requirement on all DBP-financed vessels would be retained.

In addition to the rate drop, the maximum repayment period was allowed flexibility to 15 years, with a grace period of three years, subject to evaluation of the proponent’s cash flow.

The loan value of classed vessels has likewise been increased from 50 percent to 60 percent.

The SLDP is an investment financing facility for a comprehensive and integrated transport system.

The program supports the government’s Nautical Highways Network with its three components: the RRTS, cold chain and grains bulk chain.

The program was designed to improve the country’s basic infrastructure for the efficient movement of basic commodities and to bring down the cost of goods through the introduction of a modern storage handling and transport system under proper quality control management.

Under the SLDP, DBP is helping develop identified missionary routes which include those in Palawan province.

In Palawan, this missionary route runs from Manila to Batangas; Abra de Ilog, Mindoro; San Jose, Mindoro Occidental; Coron; Taytay; El Nido to Puerto Princesa and vice versa. – Ted Torres