PHL secures 16.5-B yen loan from Japan to boost maritime safety capability

The Philippines and Japan have formalized several agreements that would help the former improve its maritime safety capability, including a deal for a P16.5 billion yen concessional loan covered by Tokyo's Official Development Assistance (ODA) for the acquisition of two large-scale patrol vessels for the Philippine Coast Guard (PCG).

The agreement for the 16.5-billion yen loan signed by Philippine Finance Secretary Carlos Dominguez and Japan International Cooperation Agency (JICA) presidentShinichi Kitaoka during President Rodrigo Duterte's official visit to Japan is part of Tokyo's continuing assistance to the PCG's Maritime Safety Capability Improvement Project (MSCIP).

President Duterte and Japanese Prime Minister Shinzo Abe witnessed the signing of the Loan Agreement, as well as the Exchange of Notes on the pact between the Department of Foreign Affairs and Japan's Ministry of Foreign Affairs.

The JICA loan, equivalent to P6.8 billion, has an interest rate of between 0.01 percent and 0.10 percent with a maturity period of 40 years, inclusive of a 10-year grace period, according to the Department of Finance (DOF).

The acquisition of two 94-meter large-scale patrol ships under Phase Two of the MSCIP is on top of the ongoing ODA from Japan for the first phase of the project, which involves the procurement of 10 40-meter PCG patrol vessels.

One of the 10 patrol vessels was delivered to the Philippines last Aug. 16, while the second one is expected to be handed over by December this year at the Japan Marine United Shipyard in Yokohama.

The targeted completion of the delivery of all the 10 vessels is on August 2018.

Besides the loan agreement, Japan also announced the provision of additional vessels for the PCG through a 600 million yen grant (about P280 million) for the procurement of high-speed boats and other equipment to boost the Philippines' anti-terrorism and security activities.

This includes the acquisition of one 20-meter high-speed vessel and 14 units of 11-meter high speed boats.

Earlier, in his state visit to China, President Duterte witnessed the signing of two key agreements that would allow the Philippines to tap Beijing's financing facilities and technical expertise to help fund its infrastructure and rural development projects.

In rites held at the Great Hall of the People in Beijing, Dominguez and Mr. Sun Ping, Vice President of the Export-Import Bank of China (China EXIM) signed the Memorandum of Understanding (MOU) on Financing Cooperation, which signifies the intent of the Bank to provide funding for Philippine projects in infrastructure, agriculture and energy, among other priority sectors, through concessional loans and other preferential financing facilities.

The specific projects covered by the MOU that would be open for financing through China EXIM, which is solely owned by the Chinese government, would still be agreed upon by the two countries and would undergo the usual approval processes.

The MOU states that projects in infrastructure, energy, transportation, engineering and manufacturing would be considered by the two governments as priorities.

A separate MOU signed by Dominguez and Chinese Commerce Minister Gao Hucheng provides Manila with financing support from Beijing in conducting feasibility studies for the Philippine government's major projects in infrastructure, agriculture and rural development, among other priority areas.

Under the agreement, China would provide support for the feasibility studies "through the dispatch of technical experts and consultants" for period of three years.

The two agreements were among the 13 agreements signed by the Philippines and China during President's Duterte's state visit.

Source: Philippine Information Agency

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