Japan OKs new 50-B yen quick-disbursing loan to PH for disasters, pandemic

MANILA, Philippines—Japan has extended another 50-billion-yen (some P23.3-billion) loan to the Philippines, which the Philippine government can spend as budgetary support not only during natural calamities but also disease outbreaks.

Finance Secretary Carlos G. Dominguez III on Tuesday (Sept. 15) signed the agreement for the post-disaster stand-by loan (phase two) on behalf of the Philippines, while the Japanese government was represented by Japan International Cooperation Agency (Jica) Philippines chief representative Eigo Azukizawa.

In a speech after the signing ceremony, Dominguez said the new loan from Japan will “make budgetary support available for quick disbursement in the event of national emergency, such as the COVID-19 pandemic.”

“The declaration of a state of calamity, public health emergency, or the imposition of enhanced community quarantine (ECQ) will activate the package,” Dominguez said.

Finance Undersecretary Mark Dennis Y.C. Joven said the loan agreement allowed tapping the facility when ECQ—the most stringent level of lockdown—was imposed to contain an outbreak in urban areas amid the ongoing COVID-19 pandemic or any future public health emergency.

Joven said whenever there’s a trigger to use the loan, the Philippines can quickly disburse multiples of one billion yen five times, or an average of 10 billion yen per tranche during the next three years, extendable four times.

Dominguez said the loan package “can be activated anytime because we are in an emergency.”

The first phase of the loan was extended by Japan to the Philippines in 2014, also amounting to 50 billion yen, which had been spent as budgetary support for the rehabilitation of areas flattened by supertyphoon “Yolanda” (international name: Haiyan).

This second phase included health emergencies and not just natural disasters. The Philippines, according to Azukizawa, was the first recipient of a health-related post-disaster standby loan facility from Japan.

The loan carries a fixed interest rate of 0.01 percent per annum payable in 40 years, inclusive of a 10-year grace period.

While resigned Japanese Prime Minister Shinzo Abe, who had close relations with President Rodrigo Duterte, will give way to a new premier soon, Dominguez said Japan’s Ambassador to the Philippines, Koji Haneda, had assured that Tokyo and Manila’s ties will remain strong.

“[Haneda] mentioned that the policies of the incoming prime minister are going to be very consistent with the policies that have been enunciated and pursued by Prime Minister Abe,” Dominguez said.

“It bodes very well for our relationships, of the Philippines and Japan,” Dominguez said, referring to Abe’s presumptive replacement, Chief Cabinet Secretary Yoshihide Suga, who had been elected as new head of Japan’s ruling party.

TSB