The Philippines will explore more opportunities to tap additional financing and technical support from Japan as the government shifts to higher gear this year the implementation of accelerates President Duterte’s centerpiece program “Build, Build, Build,” Finance Secretary Carlos Dominguez III has said.
During his bilateral meeting with Japanese Foreign Affairs Minister Toshimitsu Motegi, Secretary Dominguez also thanked Japan and its people “for being a steady force in (the Philippines’) economic and development journey.”
Secretary Dominguez said he looks forward to more frequent consultations with the Japanese government in the coming period, as the Philippines continues on the path to rapid and inclusive economic growth.
“As our ambitious ‘Build, Build, Build’ infrastructure program accelerates this year, we see more opportunities for financing and technical support from the Government of Japan,” Secretary Dominguez said at the opening of his bilateral meeting with Minister Motegi at the Department of Finance (DOF) office in Manila on Thursday morning.
Minister Motegi, in response, said that the relationship between the Philippines and Japan under the leadership of President Duterte and Prime Minister Shinzō Abe is now at a “golden age” where both countries continue “to enjoy broad-based and multi-layer development, including in the economy, infrastructure development, security, and people-to-people exchanges.”
He expressed his condolences and sympathies to the victims of last year’s earthquake in Mindanao and offered Japan’s support, knowledge and experience in disaster response and risk reduction.
“Under the recently launched Overseas Loan and Investment Initiative for ASEAN, we are ready to newly mobilize US$ 3 billion from public and private sectors over the next three years, including a total of US$1.2 billion in overseas loans and investments for ASEAN by JICA (Japan International Cooperation Agency). Let us continue to jointly discuss how to formulate development projects that can be the subject under this initiative,” Minister Motegi said.
Minister Motegi also reiterated Japan’s support for the Philippines’ “Build, Build, Build” program and welcomed the “great progress” on infrastructure development cooperation between the two countries.
He also stressed that “support for Mindanao is another major pillar of Japan’s cooperation” with the Philippines and offered support for the development of the new Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
Secretary Dominguez and Minister Motegi met to discuss new areas of expanding the robust bilateral relationship between their two countries, the progress of the infrastructure projects under “Build, Build, Build” that are being implemented with funding and technical support from Japan, and other fields of economic cooperation.
On the trilateral cooperation among the Philippines, Japan and the Asian Development Bank (ADB), Secretary Dominguez said he looks forward to continuing “our comprehensive partnership” with the multilateral institution with the support of incoming ADB president Masatsugu Asakawa, who is set to assume the Bank’s top post next week.
Minister Motegi thanked the Philippines for its support for Mr. Asakawa’s nomination to the ADB presidency and said Japan would like to further deepen the trilateral cooperation among the ADB, Japan and the Philippines.
Secretary Dominguez attributed the Philippines’ economic gains, in part, to its strong partnership with Japan, which has significantly increased its official development assistance (ODA) to the country over the past few years as demonstrated by the 10 loan agreements signed between the two countries since President Duterte assumed office in 2016.
To date, Japan remains the Philippines’ leading source of ODA.
He also thanked Japan for its support in formulating a masterplan for the development of the Subic Bay area and its surrounding communities.
“With the Memorandum of Cooperation for this commitment signed last month in Hakone, we look forward to Japan’s swift creation of the action plan for this project,” Secretary Dominguez said.
“Given what we have achieved in developing the Clark special economic zone, I am confident that the full development of the Subic Bay will provide another important node for knowledge-based industries serving the whole of East Asia,” he added.
Secretary Dominguez said Japan and the Philippines can be “demographic partners” given that the median age of the Japanese population is now moving up to 48 years old, while the median age of the Philippines’ workforce stands at 24 years old. The Philippines’ young, technology-savvy workers will complement Japan’s forward-looking enterprises, advanced research and marketing programs, he said.
To speed up the implementation of the Duterte administration’s big-ticket infrastructure projects being rolled out with Japanese funding support, Dominguez informed Minister Motegi of the success of their two countries’ unique high-level mechanism and “fast and sure approach” of holding regular meetings to iron out issues concerning these projects.
Through the Philippines-Japan High-Level Joint Committee on Infrastructure Development and Economic Cooperation, he said the approval process for the loan agreements between the two countries have been shortened by an average of three to four months.
This top-level committee has so far held nine meetings, alternating between venues in Japan and the Philippines, since its creation in 2017. The ninth meeting was held in Hakone, Japan last month. Its 10th meeting is set in Bohol, where the new Bohol-Panglao International Airport was completed with Japan’s assistance.
Secretary Dominguez said that with Japan’s unwavering commitment to the Philippines’ comprehensive development, the Duterte administration has been able to put in place game-changing policy reforms to fully unleash the country’s economic potentials.
These reforms include, he said, a comprehensive tax reform program (CTRP), the establishment of the national ID system, universal health care (UHC), and rice trade liberalization.
These efforts have been rewarded by a “BBB+” credit rating upgrade, the highest that the Philippines has received so far; and a leap to 95th place in the latest World Bank’s Ease of Doing Business (EODB) Report that has placed the country among the ranks of the world’s top 100 competitive economies, Secretary Dominguez noted.
On top of these achievements is the reduction in poverty incidence to 16.6 percent in 2018 from 23.3 percent in 2015, which places the government well on track in accomplishing its goal of lowering this to 14 percent by the end of President Duterte’s term in 2022, he added.
“Our economic performance and exemplary governance are reflected in the approval rating of our decisive leader,” said Secretary Dominguez in pointing to the results of the most recent public opinion survey conducted by Pulse Asia, which showed President Duterte receiving an 87 percent approval rating—an unprecedented feat for a head of state during the second half of his or her term.
Ten (10) loan accords have been signed thus far between Manila and Tokyo for the financing of the Duterte administration’s “Build, Build, Build” flagship projects and other priority initiatives.
These are the agreements for the [1] Maritime Safety Capability Improvement Project for the Philippine Coast Guard (Phase II); [2] Harnessing Agribusiness Opportunities through Robust and Vibrant Entrepreneurship Supportive of Peaceful Transformation (HARVEST); [3] Cavite Industrial Area Flood Risk Management Project; [4] Arterial Road Bypass Project (Phase III) in Bulacan; [5] New Bohol Airport Construction and Sustainable Environment Protection Project (II); [6] Metro Rail Transit Line 3 (MRT3) Rehabilitation Project; [7] Pasig-Marikina River Channel Improvement Project (Phase IV); [8] North-South Commuter Railway Extension Project or NSCREP (1st tranche of loan); [9] Metro Manila Subway Project or MMSP (Phase I), which is the single biggest venture under “Build, Build, Build; and the [10] Road Network Development Project in Conflict-Affected Areas in Mindanao.
Japan is the country’s No. 1 provider of ODA loans and grants totaling US$8.63 billion (46 percent share of the country’s total ODA loan portfolio) as of September 2019.
It is the Philippines’ second major trading partner in 2018 (US$ 21.1 billion), its second largest export market (US$ 10.3 billion), and its third import supplier (US$ 10.82 billion).
Foreign direct investment (FDI) inflows from Japan reached US$218.91 million in 2018, representing a 203.5 percent hike from the 2017 figure of US$72.13 million.
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