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Manila Bulletin devider Business devider The Economy devider DOF: No '₱28-billion' loan from South Korea exists

DOF: No '₱28-billion' loan from South Korea exists

Published Sep 10, 2025 01:33 pm
Department of Finance building in Manila (DOF photo)
Department of Finance building in Manila (DOF photo)
Following reports of South Korea dropping government aid for a ₱28-billion infrastructure project in the Philippines, the Department of Finance (DOF) has denied that such a loan exists between the two governments.
According to the DOF, the Rural Modular Bridge Project loan is instead being proposed to be financed by France, not South Korea.
“As regards the supposed ₱28-billion official development assistance (ODA) loan between South Korea and the Philippines, the DOF categorically clarifies that no such loan exists,” the DOF said in a statement released on Wednesday, Sept. 10.
Meanwhile, negotiations with France are now in an advanced stage, with the project’s technical and financial terms being finalized.
The DOF further explained that the project was initially considered for funding through South Korea, but the Department of Agrarian Reform (DAR) decided to halt discussions last year due to non-alignment on scope and other key technical specifications.
As early as the last quarter of 2024, the government began seeking additional bilateral partners to implement the full scope of the project. “Hence, there is no existing loan for the said project with South Korea.”
Changes in lenders follow standard practice, wherein the Philippine government may explore funding options with multiple development partners for major projects.
Following this clarification, the DOF said the Philippines reaffirms its commitment to its bilateral partners to “match their trust and confidence with full transparency and accountability.”
Latest reports indicate that South Korean President Lee Jae-myung has ordered the immediate termination of any development for the project after it was revived due to pressure from the country's Congress. Poor loan management was cited as the reason for the cancellation.
While this means delayed implementation of the infrastructure project in the Philippines, Lee expressed relief over the project’s status, noting that funds remain untouched.
“What is most fortunate is that the project has not yet commenced, meaning funds such as the Economic Development Cooperation Fund (EDCF) support have not been expended,” Lee said in a Facebook post linking to the article.
Reports also indicate that the South Korean Ministry of Economy and Finance had turned down EDCF funding support in February 2024 “due to concerns over potential corruption and poor management.”
“There is significant meaning in preventing the unnecessary waste of 700 billion Korean won in taxpayer money and preemptively blocking risks that could lead to poor management and corruption,” Lee said.

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