MANILA, Philippines—The Philippines again borrowed from Japan to finance its prolonged fight against COVID-19, this time worth 30 billion yen or about P12.3 billion.
Once the second phase of the COVID-19 crisis response emergency support loan takes effect, it will add to the pandemic-induced debts that totaled P1.31 trillion as of January, which the government will repay in the next 40 years.
In the case of the latest concessional loan extended by the Japanese government, documents of its aid arm Japan International Cooperation Agency (Jica) showed a 15-year repayment period, on top of a four-year grace period. The interest to be slapped was low, at 0.01 percent per annum.
Jica documents showed that the loan will be executed and the project completed in September this year.
This loan, whose agreement was signed in Tokyo by Finance Secretary Carlos Dominguez III on behalf of the Philippines last Monday (April 25), will “support the [Philippine] government’s emergency response against the COVID-19 crisis to promote infection-prevention measures, through providing budget support co-financed by the Asian Development Bank (ADB),” Jica said, referring to the Manila-based multilateral lender.
Jica added that the loan will help the Philippines achieve three goals under the United Nations’ (UN) sustainable development goals (SDGs) — goals 1 (no poverty), 3 (good health and well-being), as well as 8 (decent work and economic growth).
New Jica president Akihiko Tanaka, who assumed office just this month, signed the loan agreement on behalf of Japan.
The Department of Finance (DOF) will implement the project. In a statement on Tuesday (April 26), the DOF noted that the loan’s first phase amounting to a bigger 50 billion yen last year “assisted the Philippine government’s efforts to contain the spread of COVID-19 and provide economic relief to Filipinos hit the hardest by the pandemic.”
“Japan remains to be the Philippines’ biggest provider of official development assistance (ODA), with Jica — its foreign assistance arm — being an extremely reliable partner in helping implement the priority programs of the Duterte administration,” Dominguez said.
He cited a total of 1 trillion yen in financing from Japan mostly for the ambitious “Build, Build, Build” program, which he said “immensely improved the logistics backbone of our country; created quality jobs for our people; and brought down the costs of doing business.”
“The term of President Duterte’s administration ends in June of this year. We have accomplished much in improving our economy’s fiscal position and growth prospects. We would not have done this without the timely assistance of the people and the government of Japan,” Dominguez told Jica officials.
Moving forward, Dominguez said that “as we intensify our climate action projects, we hope to also secure additional financing for natural and health-related disaster response programs” from Japan.