The Department of Finance (DOF) said that the Philippine government is on track to finalize four loan agreements with the Japan International Cooperation Agency (JICA) this year.
According to the DOF, these loan agreements, estimated at $1.5 billion (P86.4 billion), are earmarked for projects related to maritime safety, road infrastructure, and flood risk management for the years 2024 to 2025.
“The said development was discussed during a meeting between DOF Undersecretary for the International Finance Group (IFG) Joven Balbosa and JICA’s Director General of Southeast-Asia and Pacific Department Hayakawa Yuho on April 18, 2024 at the JICA Office in Washington, D.C,” the department said.
During the meeting, Balbosa reaffirmed the strong partnership between the Philippines and JICA, acknowledging Japan as the country’s largest official development assistance (ODA) partner with $12.30 billion net commitments (loans and grants) or 32.82 percent share of total ODA as of December 2023.
“The DOF and JICA have discussed executing a pipelined commitment of around JPY 227.6 billion (around $1.5 billion) from April 1, 2024 to March 31, 2025, as well as an annual average pipeline of about JPY 249.2 billion (roughly $1.6 billion) over the next five years from 2023 to 2027,” the agency said.
Aside from the usual portfolio of infrastructure projects funded by JICA, the agency shared that it is expanding into other sectors that are in line with the Marcos administration’s development objectives, such as agriculture, education, and health.
The JICA likewise expressed its openness to scale up its policy-based lending, with an intent to co-finance the Climate Change Action Program (CCAP), Subprogram 2 with the Asian Development Bank (ADB) and Agence Française de Développement (AFD).
The CCAP will support the Philippines in implementing its national climate policies, including its Nationally Determined Contribution (NDC). The program will intensify efforts to transform key sectors toward a climate-resilient and low-carbon economy.
Moreover, both parties engaged in an in-depth discussion on project implementation issues, to which they committed to maintaining open dialogue and addressing any delay to improve overall project management and minimize costs to the government.
The DOF also sought JICA’s assistance in bringing in more private sector financing to support the administration’s development goals as the Philippines transitions to an upper-middle income country (UMIC) status, which would mean it would gradually move away from concessional financing.