South Korea has offered a $1.7 billion credit facility and another $7 million in the form of non-lending programs to the Philippines to help implement the Duterte administration’s priority programs in the transport, information and communications technology, and energy sectors.
These financial instruments would be made available by the South Korean government through the Export-Import Bank of Korea (KEXIM), which manages its Economic Development Cooperation Fund (EDCF), an official development assistance facility.
According to the Department of Finance (DOF), among the financial tools that the Philippines can tap from South Korea is a $100-million credit line for a Project Preparation Facility, which is available at zero interest and payable in 40 years (inclusive of a 10-year grace period).
The KEXIM credit line can also be tapped via a tied loan facility with South Korean companies entering into joint ventures with Philippine local firms.
The project preparation facility can be tapped by the Department of Public Works and Highways (DPWH) and the National Irrigation Administration (NIA) for its infrastructure projects, the DOF’s International Finance Group said in a report to Finance Secretary Carlos Dominguez III.
“A country program mission from KEXI-EDCF that was here from August 29 to 31 met with Philippine officials and identified the priority sectors of ICT, transport and energy for possible loan assistance from South Korea,” said IFG in its report during a recent DOF Executive Committee (Execom) meeting.
Aside from the NIA and DPWH, the other agencies with identified projects in the pipeline for the KEXIM loan facility are the Department of Information and Communications Technology (DICT), Department of Agriculture (DA), Department of Transportation (DOTr) and the National Electrification Administration (NEA), the IFG told Dominguez during the Execom meeting.
This signing ceremony will take place on the sidelines of the 2017 summit of the Association of Southeast Asian Nations that will be held in Manila in November. (DOF)
