Loan for Laguindingan airport gets BSP approval

The Bangko Sentral ng Pilipinas has approved in principle a proposed Korean won-denominated loan equivalent to $13.2 million meant to help make the Laguindingan airport in Misamis Oriental operational.

BSP Governor Amando M. Tetangco Jr. said in an interview the loan is being extended by the Emport-Import Bank of Korea (Kexim) through its Economic Development Cooperation Fund (EDCF).

Tetangco explained that the fund is earmarked for the procurement of a navigation system and support facilities for the airport, including installation and training of personnel.

“Construction of the airport is finished, with the help of previous loans from Kexim,” he said. “Now they want to help provide the needed facilities.”

The BSP chief was referring to a 21.2-billion won EDCF loan that was approved in 1998 and has been fully drawn as of the end of March.

Based on historical foreign exchange data gathered by the company Foreign Capital Market, the amount is equivalent to between $12.4 million and $17.5 million.

Tetangco said construction of the Laguindingan airport was also helped by a mixed-currency credit facility—also from Kexim—comprising of 7.6 billion won, equivalent to $8.2 million and $62.75 million.

He said the mixed loan was approved in 2008 and is already partly drawn.

The Laguindingan airport project is meant to meet the increasing air transportation demand in Mindanao as well as enhance the quality and safety of air transport service in the area.

Tetangco said the BSP approved the new proposed loan partly because it is highly concessional with a long maturity of 40 years and a grace period of 13.5 years, as well as a low interest rate of 0.15 percent yearly.