By LEE C. CHIPONGIAN
The government and South Korea, through its Export-Import Bank of Korea (KEXIM), has provided a $50 million, or ₱2.73 billion, financing for the Philippines-Korea Project Preparation Facility (PKPPF) to fast-track the implementation of the “Build, Build, Build” infrastructure projects.
Finance Secretary Carlos G. Dominguez III and KEXIM Chief Representative yesterday exchanged the signed documents on the loan.
Dominguez said the facility which will speed up BBB will total $71 million or ₱3.87 billion but KEXIM will fund bulk of it or $50 million. The government will cover the balance or $21 million through counterpart financing and it will be handled by the BBB project implementing agencies.
“The Philippines and Korean governments are confident that this loan will hasten the execution of a number of key water and irrigation, flood control, and road and bridge projects all over the archipelago,” said Dominguez.
The DOF chief reiterated that KEXIM loans have “very friendly terms” with zero-interest rate, a repayment period of 40 years and its inclusive of a 10-year grace period. “Service charges are set at only 10 basis points or one-tenth of one percent of each disbursement,” he added.
Dominguez said the BBB program in 2020 will be “firing on all cylinders” with an on-time expenditure plan.
But, there are crucial elements that will make any infrastructure-related project implementable and that is how effective project preparatory activities are.
“These are necessary and integral aspects of any project as they help us 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. Rigorous analyses also guide us in determining the best sources of financing for any given project,” noted Dominguez. These preparatory activities include pre-feasibility and feasibility studies, detailed engineering designs, and safeguard assessment analyses.
The current KEXIM loan will speed up projects of the Department of Public Works and Highways, the National Irrigation Administration, and other agencies.
The $50 million is part of the $1 billion pledge that South Korea approved as official development assistance to the Philippines. This loan agreement was signed mid-2018.
KEXIM’s Jang 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 BBB program.
Some 15 projects are considered and could be included under the PKPPF, according to Jang. “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,” he said.
In 2018, during President Duterte’s official visit to South Korea, the DOF and KEXIM has signed a $173-million loan agreement for the construction of the Cebu International Container Port.