The governments of the Philippines and Japan yesterday signed a stand-by loan agreement for the Duterte administration’s post-disaster response, the Department of Finance (DOF) said.
Finance Secretary Carlos G. Dominguez III, representing the Philippines, and Japan International Cooperation Agency (JICA) Chief Representative Eigo Azukizawa signed yesterday an agreement for a 50-billion yen (P23 billion) standby loan.
Dominguez said this latest deal is a quick-disburse Japanese funding support to the government’s post-disaster response efforts in the event of a national calamity or health emergency, like the COVID-19 crisis.
This new accord between the Philippines and Japan marked the second phase of the Post-Disaster Standby Loan (PDSL 2).
Under the agreement, the disbursement of the standby loan to the Philippines will be triggered by either declaration of a state of calamity or state of public health emergency.
In the case of the current COVID-19 pandemic or any other public health emergencies, the imposition of an enhanced community quarantine or its equivalent in the National Capital Region or in any other highly urbanized area in the country will also trigger the disbursement of the loan.
“The ongoing pandemic underscores the need to further improve our policy and institutional framework for disaster risk reduction and management. It likewise emphasizes the need to build our financial resilience against disasters and similar emergencies,” Dominguez said.
“The ability to mobilize financial resources without delay is essential to emergency preparedness.,” he added.
Equivalent to about P23.3 billion, the PDSL 2 will be available for quick disbursement in tranches within three years, once the loan is declared effective, and may be extended for an additional three-year period for up to four times.
“Again, we express our heartfelt gratitude to the people and the Government of Japan… this loan package is an added testament to the treasured solidarity between our countries,” Dominguez said.
The maturity period of the PDSL 2 is 40 years, inclusive of a 10-year grace period.
Dominguez pointed out that the loan’s highly concessional terms underscore “the abiding trust between Japan and the Philippines.”