South Korea offers $1.7-B loan, non-lending aid for Philippine transport, energy
MANILA, Philippines — Ahead of a key regional summit in Manila, South Korea has offered a $1.7 billion credit facility, and other non-lending programs to the Philippines to help roll out the Duterte administration’s priority programs in the transport and energy sectors.
In a statement on Wednesday, the Department of Finance said the financial instruments would be available through the Export-Import Bank of Korea, which controls an economic development cooperation fund that facilitates official development assistance.
Among the financial tools that the Philippines can use from South Korea is a $100-million credit line for a project preparation facility, which is available at zero interest and payable in 40 years (inclusive of a 10-year grace period), the DOF said.
The KEXIM credit line can also be tapped via a tied loan facility with South Korean companies entering into joint ventures with Philippine local firms, the DOF added.
Meanwhile, aside from the $1.7 billion credit facility, the South Korean government has also tendered another $7 million in the form of non-lending aid.
The signing ceremony will take place on the sidelines of the 31st Association of Southeast Asian Nations Summit in Manila in November.
“A country program mission from KEXI-EDCF that was here from August 29 to 31 met with Philippine officials and identified the priority sectors of ICT, transport and energy for possible loan assistance from South Korea,” the DOF’s International Finance Group said in a report.
The project preparation facility can be tapped by the Department of Public Works and Highways and the National Irrigation Administration for their infrastructure projects.
Other agencies with identified projects lined-up for the KEXIM loan facility are the Department of Information and Communications Technology, Department of Agriculture, Department of Transportation and the National Electrification Administration.
Last October, the government said it is firming up a medium-term framework agreement with the South Korean government that would create a pipeline of flagship infrastructure projects to be financed by official development assistance in the next five years.
Outside the medium-term framework agreement, KEXIM has extended loans for other projects under individual loan deals.
These include the P4.9-billion Panguil Bay Bridge Project in Mindanao in 2016 and the P11-billion Jalaur River Multi-purpose Irrigation Project in Iloilo.
KEXIM also extended in 2012 a $71.6-million loan for the upgrade of the Puerto Princesa International Airport and in 2011 extended a $13.2-million loan for building the operational capacity of the Laguindingan airport in Misamis Oriental.
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