South Korea extends $50M loan for PHL infra projects preparation
The South Korean government has extended $50 million in loans to support the preparatory works of the Philippine government’s infrastructure projects.
During the ceremonial exchange of loan documents for the Philippines-Korea Project Preparation Facility in Manila on Tuesday, Finance Secretary Carlos Dominguez III said the facility will “support swift implementation of infrastructure projects of the Department of Public Works and Highways (DPWH), National Irrigation Administration (NIA), and other relevant agencies.”
Dominguez and Chief Representative Sungho Jang of the Export-Import Bank of Korea (Kexim) exchanged the signed documents on the loan.
The $50-million or P2.73-billion loan extended by South Korea through the Kexim’s Economic Development Fund aims to support the preparatory engineering services of key infrastructure projects of both DPWH and NIA such as feasibility studies, detailed engineering-design, and environmental impact assessment.
Dominguez, meanwhile, said the project preparatory facility has a total cost of $71 million or P3.87 billion, $50 million of which is from Kexim.
“The balance will be financed by the counterpart of the Philippine gov’t thru the projects’ implementation implementing agencies,” he said.
The loan also has “very friendly” terms, the Finance chief noted.
“It charges a zero interest rate. It has a repayment period of 40 years inclusive of a 10-year grace period,” Dominguez said.
“Service charges are set at only 10 basis points or a tenth of 1% of each disbursement,” he added.
This is the second loan agreement the Philippines signed under the $1 billion pledge of South Korea in official development assistance to the country.
“We thank the Republic of Korea for the staunch support it has extended in assisting our continued economic emergence. Please be assured that we will strictly monitor the projects so that no Korean taxpayer’s money is wasted and that the projects will bring lasting benefits to the Filipino people,” Dominguez said.
Chief Representative Jang, for his part, said the facility is "envisioned to play a key role not only in the conceptualization, but also in the implementation of, strong and interactive programs and initiatives" under the "Build, Build, Build" program.
Jang said there are currently 15 projects being considered under the facility.
The exchange of documents was witnessed by Public Works Secretary Mark Villar, Finance Undersecretary Mark Dennis Joven, Public Works Undersecretary Emil Sadain, National Irrigation Administration (NIA) Deputy Administrator C’zar Sulaik and Minister Counsellor Kim Sun Young of the Korean Embassy.
“This year, we expect President Duterte’s 'Build, Build, Build' program to be firing on all cylinders. The stage has been set. The national expenditure plan has been enacted on time this year. Our infrastructure agencies are poised to execute hundreds of infrastructure projects all over the country in the next few months,” Dominguez said.
The Finance chief said the two countries are confident that this loan will hasten the execution of several major water and irrigation, flood control, and road and bridge projects all over the country.