Spain is offering the Philippines $300 million in official development assistance (ODA) mainly for infrastructure projects, the Department of Finance said.
Finance Assistant Secretary Maria Edita Z. Tan told reporters last week that while the Spanish and Philippine governments were still crafting the memorandum of understanding (MOU) for the planned ODA, “the terms are very good.”
“We can either tap the euro facility or the US dollar facility. For the euro, it’s 0.25-percent (interest rate) over a 35-year period inclusive of a 10-year grace period, while the dollar facility is 1.15-percent (interest) over a 20-year period inclusive of a 10-year grace period. That could cover either project or program loans,” Tan explained.
Tan said the Spanish government preferred to finance projects in infrastructure, energy and renewable energy, telecommunication, water treatment, solid waste, agriculture, food and tourism.
The MOU is expected to firm up within the next two months, Tan said.
This would be the Philippines’ first pure ODA from Spain as the government had only received Spanish grants in the past, according to Tan.
For the period 2019 to 2022, the Development Budget Coordination Committee had programmed a borrowing mix of 75-percent domestic, 25-percent foreign, the latter of which included ODA from development partners and multilateral lenders, mainly China, Japan, the World Bank and the Asian Development Bank.
This year, the borrowing is 64:36 in favor of local sources.
The Duterte administration is embarking on an ambitious “Build, Build, Build” Program, which seeks to accelerate infrastructure spending and develop industries that will yield robust growth, create jobs and improve the lives of Filipinos. Public spending on infrastructure projects is targeted to reach 9 trillion from 2017 to 2022.