The Duterte administration’s “Build, Build, Build” (BBB) program has gained another major boost after Manila and Seoul opened a $71-million fund to hasten the rollout listed infrastructure projects, and leave behind P1.4 trillion worth of projects in the pipeline for the next administration.
In a briefing on Tuesday, Finance Secretary Carlos G. Dominguez III said an amount equivalent to P3.87 billion would be financed by a loan from the Export-Import Bank of Korea (Kexim) Economic Development Cooperation Fund and government funds.
The bulk of the funds worth $50 million, or P2.73 billion, will be sourced from Kexim nd the remaining $21 million, or P1.14 billion, will be financed by the government through its implementing agencies.
“This year, we expect President Duterte’s BBB program to be firing on all cylinders. The stage has been set. The National Expenditure Program [NEP] has been enacted on time this year, our infrastructure agencies are poised to execute hundreds of infra projects all over the country in the next few months,” Dominguez said.
The finance chief said the $50 million loan from the South Korean government will enjoy a zero concessional interest rate and a repayment period of 40 years.
There is also a 10-year grace period at which time the Philippines will not be required to pay its dues. Dominguez also said service charges are set at only 10 basis points, or one-tenth of 1 percent of each disbursement.
The Philippines-Korea Project Preparation Facility (PKPPF) would be tapped for project preparation activities, such as the conduct of pre-feasibility studies, as well as detailed engineering and safeguard assessment analysis for projects undertaken by the Department of Public Works and Highways (DPWH) and the National Irrigation Administration (NIA).
He said these activities under the PKPPF are necessary and integral aspects of any project as they will help the government determine whether a particular project is economically viable and sustainable over the long term “and, ultimately, whether the Filipino people will reap the economic benefits and outweigh the public resources that the government might invest.”
The PKPPF, Dominguez said, would also enable the government to subject proposed project to rigorous analysis to determine the best source of financing.
“The total pipeline we have is around P50 billion. When we leave in 2022, the total pipeline will be around P1.4 trillion. So that is our legacy to the next administration,” Dominguez said.
Kexim Chief Representative Sungho Jang, for his part, said the PKPPF is “envisioned to play a key role not only in the conceptualization, but also in the implementation of a strong and interactive programs and initiatives” under the BBB program.
He said there are currently 15 projects being considered under the facility.
Public Works Secretary Mark Villar said preparation activities of the projects to be funded through the fund includes the Pampanga and Agusan river basin flood control- projects, as well as the Central Luzon Link Expressway project Phase 2 and the Zamboanga City bypass project road, among others.
NIA Deputy Administrator Czar Sulaik said their list includes a multipurpose irrigation power project in San Mariano, Isabela, and another irrigation project in Palanan, Isabela, as well as a catch basin irrigation project in North Cotabato, among others.
Dominguez said the loan for the PKPPF is the second accord signed between the two countries as part of Korea’s $1-billion pledge in official development assistance to the Philippines under President Duterte’s term.
The DOF and Kexim signed a $173-million loan agreement for the construction of the Cebu International Container Port during the official visit of Duterte to Korea last year.