South Korea will provide the Philippines a US$50-million loan to fund the feasibility studies and other project preparation activities necessary to speed up the implementation of the Duterte administration’s “Build, Build, Build” infrastructure projects under an agreement signed between the two countries.
Finance Secretary Carlos Dominguez III and Chief Representative Sungho Jang of the Export-Import Bank of Korea (KEXIM) exchanged the signed documents on the loan (equivalent to P2.73 billion) for the Philippines-Korea Project Preparation Facility (PKPPF) during ceremonies on Tuesday at the Department of Finance (DOF) office in Manila.
The loan agreement for the PKPPF was earlier signed by Secretary Dominguez on behalf of the Philippine government and KEXIM Senior Executive Director Deog-Yong Shin on behalf of the Korean agency.
Secretary Dominguez thanked Korea for the zero-interest loan, which will support the funding for project preparation activities, such as pre-feasibility and feasibility studies, detailed engineering designs, and safeguard assessment analyses, for projects under President Duterte’s centerpiece “Build, Build, Build.”
He said these activities under the PKPPF are necessary and integral aspects of any project as they will help the government determine whether a particular project is economically viable and sustainable over the long term “and, ultimately, whether the Filipino people will reap the economic benefits and outweigh the public resources that the government might invest.”
The PKPPF, Secretary Dominguez said, will also enable the government to subject a proposed project to rigorous analysis to determine the best source of financing for it.
“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,” Secretary Dominguez said.
Chief Representative Jang, for his part, said the PKPPF 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.
He said there are currently 15 projects being considered under the Facility.
“During the ASEAN-Korea Commemorative Summit in November 2019, Korean President Moon Jae-in referred to the Philippines as the ‘future of Asia.’ If the PKPPF signing and our two countries’ continued cooperation are any indications, the future looks very promising, indeed,” Mr. Jang said.
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.
Secretary Dominguez said the PKPPF will rely on the best expertise available to help the Philippine government efficiently undertake project preparation activities for its big-ticket infrastructure projects.
“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,” Secretary Dominguez said.
He 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.
The loan will primarily benefit projects implemented by the Department of Public Works and Highways (DPWH) and the NIA.
This project preparation facility will have a total cost of about US$71 million, of which US$ 50 million (P2.73 billion) will be accessed through the loan extended by KEXIM through Korea’s Economic Development Cooperation Fund (EDCF).
The balance will be financed by the counterpart fund of the Philippine government through the project’s implementing agencies.
Aside from being a zero-interest loan, KEXIM granted the Philippines a repayment period of 40 years, inclusive of a 10-year grace period.
Service charges are set at only 10 basis points or a tenth of one percent of each disbursement, Secretary Dominguez said.
He noted that the loan for the PKPPF is the second accord signed between the two countries as part of Korea’s US$ 1-billion pledge in official development assistance (ODA) to the Philippines under President Duterte’s term.
The DOF and KEXIM signed a US$173-million loan agreement for the construction of the Cebu International Container Port during the official visit of President Duterte to Korea last year.
-oOo-
