The South Korean government offered to extend $1 billion in official development assistance loans to the Philippines to finance key infrastructure programs.
The National Economic and Development Authority said in a statement the offer for concessional loans would increase the prospects of successfully implementing the projects lined up under the Philippine Development Plan 2017–2022.
Officials of the Export-Import Bank of Korea met with selected agencies of the Philippine government on May 29 to June 1 to discuss possible projects that may form part of the Kexim pipeline in the medium term (2017-2022), given the bank’s willingness to allocate for the Philippines $1 billion in concessional loans over a six-year period.
Kexim identified transportation, ICT and energy infrastructure as priority areas in the proposed cooperation considering Korea’s comparative advantage in these sectors.
Aside from concessional loans, Kexim is also offering support through its Knowledge Sharing Program facility, a knowledge-driven economic cooperation program that will enable Korea to share its successes and failures and propose applicable policy recommendations.
Kexim also expressed willingness to assist in the Philippines’ pre-investment activities, including project preparation and feasibility studies and plans formulation, through the bank’s Project Preparation Facility.
Neda Undersecretary Rolando Tungpalan expressed appreciation for Korea’s offer of assistance, saying this would boost the Philippine government’s efforts to carry out its infrastructure program, which requires roughly P8.4-trillion.
“We need to be ambitious, and at the same time we need to scale up our implementation capacity. Financing this six-year infrastructure program will be sourced from domestic resources, Official Development Assistance and Public-Private Partnership programs,” he said.
The Philippines and Korea are set to finalize the framework agreement in August 2017.
Tungpalan said last week the government would fund through the national budget most of the infrastructure projects under the 2017-2022 Public Investment Program.
He said of the $168 billion (P8.44 trillion) total infrastructure investment requirement under the 2017-2022 Public Investment Program, which translates the Philippine Development Plan into these programs and projects, the bulk of the projects will be implemented through local financing or GAA at roughly 66 percent.
“The remaining projects will be carried out through PPP at 18 percent and ODA at 15 percent,” Tungpalan said.