S. Korea hikes loan program for Philippines

MANILA, Philippines—South Korea is making available $500 million in concessional loans to the Aquino administration to support private-public partnerships (PPPs), according to the National Economic and Development Authority (NEDA).

The $500 million will be accessible for the next three years through South Korea’s overseas development assistance (ODA) loan program under the Economic Development Cooperation Fund (EDCF) Framework Arrangement for 2011-2013.

The amount is 66 percent higher than the $300-million EDCF commitment for the period 2007-2009.

Economic Planning Secretary Cayetano Paderanga Jr., who is also NEDA director general, said in a statement that the ODA from South Korea would help encourage investments since the concessional loans for PPPs would improve prospects for profitability for the projects.

Priority sectors for EDCF funding will include water, agriculture and those supporting “green” growth such as renewable energy and environmental protection. This reflects the Philippines’ priorities as outlined in the Philippine Development Plan through 2016.

The Philippines’ PPP program is a key element for the 7- to 8-percent annual economic growth target (as measured by gross domestic product) set in the medium-term development plan.

Paderanga has told Korean government officials and investors that their support was vital to attain adequate funding and implementation of big-ticket infrastructure projects through a policy response such as PPP.

“This will also address the short supply of government resources, particularly its investments capacity and technological know-how,” Paderanga said.

As of 2010, South Korea’s commitment to the Asian region, including Vietnam, Indonesia, Sri Lanka, Bangladesh and the Philippines, has a 66-percent share, with Africa receiving 17.8 percent.

Aside from the EDCF, the South Korean government expressed interest in extending its Knowledge Sharing Program (KSP), which is designed to share its development experience to developing countries such as the Philippines.

Potential areas for KSP funding include village development, multi-industry clusters and information technology for a government accounting system.