The Departments of Finance (DOF) and of Transportation (DOTr) will create a technical working group (TWG) to work out the transfer of several patrol vessels from the Department of Transportation (DOTr) to the Bureau of Customs (BOC) to help strengthen the latter’s border protection and anti-smuggling capabilities.
Comprising four units of 24-meter vessels and one unit of 82-meter vessel, these patrol boats were acquired through loans from European banking institutions under the Philippine Port and Coast Guard Capability Development Project (PCG Vessels Project),
The International Finance Group (IFG) reported to Finance Secretary Carlos Dominguez III in a recent DOF executive committee meeting that the DOF, which had contracted the loan, has asked the DOTr to transfer some of the patrol boats to the BOC to help boost the Bureau’s war against smuggling.
The BOC said earlier that the smuggling of vehicles, oil and cigarettes into the country has cost the government more than P50 billion in lost revenues.
A study done by the Washington DC-based research group Global Financial Integrity (GFI) had reported that an estimated $90.25 billion – worth of outflows were recorded from the Philippines from 2004 to 2013, for an average of $9.03 billion annually that it attributed to the illegal trade in goods or smuggling.
IFG told Dominguez that the funds for the PCG Vessels Project worth P5.9 billion or about P111.58 million euros was sourced from the unutilized portion of the Buyer’s Credit Facility originally for the Greater Maritime Access Ports Project, unrecouped advanced payment and the counterpart funds provided by the then Department of Transportation and Communications (DOTC).
The loan granted by the BNP Paribas Group and the Credit Agricole CIB was guaranteed by the French government, through Bpifrance Assurance Export, the export credit agency of the same. It is repayable in 12.5 inclusive of two-and-a-half years grace period, according to the IFG.
The four units of 24-meter boats are expected to be delivered in 2018 while the 82-meter vessel is expected to arrive in February 2019.
During President Duterte’s official visit to Japan last year, Dominguez and Shinichi Kitaoka, the president of the Japan International Cooperation Agency (JICA) formalized several agreements that would help improve the Philippines’ maritime safety capability, including a deal for a 16.5 billion yen concessional loan covered by Tokyo’s Official Development Assistance (ODA) for the acquisition of two large-scale patrol vessels for the PCG.
The agreement for the 16.5-billion yen loan is part of Tokyo’s continuing assistance to the PCG’s Maritime Safety Capability Improvement Project (MSCIP).
Equivalent to P6.8 billion, this JICA loan was extended at an interest rate of between 0.01 (consulting component) and 0.10 (non-consulting component) percent (per annum) with a maturity period of 40 years, inclusive of a 10-year grace period.
The acquisition of two 94-meter large-scale patrol ships under Phase Two of the MSCIP is on top of the ongoing ODA from Japan for the first phase of the project, which involves the procurement of 10 units of 40-meter PCG patrol vessels.
As of June 2017, 5 out of 10 vessels have already been delivered. The targeted completion of the delivery of all the 10 vessels is in August 2018.
Besides the loan agreement, Japan had also announced the provision of additional vessels for the PCG through a 600 million yen grant (about P280 million) for the procurement of high-speed boats and other equipment to boost the Philippines’ anti-terrorism and security activities.
This includes the acquisition of one 20-meter high-speed vessel and 14 units of 7-meter high speed boats.
