A ¥4.376-billion (about P2.10 billion) supplemental loan agreement has been signed by the Department of Finance (DOF) with the Japan International Cooperation Agency (Jica) on Monday to help fund the second phase of the New Bohol Airport Project, which covers the expansion of its runway and passenger terminal building.
Finance Secretary Carlos G. Dominguez III and Jica Chief Representative Yoshio Wada signed the deal for Phase II of the New Bohol Airport Construction and Sustainable Environmental Protection Project in Panglao, an island in the north Bohol Sea.
“This project will have a substantial impact on the economic performance of Central Philippines,” Dominguez said.
Wada said they expect the airport project to “accelerate the economic growth of Bohol and contribute to its transformation as another key economic center in the region.”
The loan (about $40.61 million at current exchange rates) carries an interest rate of 0.1 percent per annum for non-consulting services and 0.01 percent per annum for consulting services. The loan carries a maturity of 40 years inclusive of a 12-year grace period.
The second phase of the airport project covered by Jica’s supplemental loan will include the extension of the runway to 2,500 meters from the current 2,000 meters. After the extension, the airport would be able to accommodate large commercial aircraft.
The loan would also be used to expand the passenger terminal building from 8,500 sq m to 13,300 sq m, in anticipation of the possible congestion that could arise should tourism traffic in the area rise faster than expected.
Using local funds, the Department of Transportation (DOTr) plans to further enhance the capacity of the airport, also known as the Bohol Panglao International Airport, by extending the runway to 2,800 meters, constructing a separate cargo terminal and a parallel taxiway and building a fuel depot plus a fuel hydrant system.
The DOTr said that with most of the work on the original project nearing completion, the ceremonial opening of the airport will likely happen later this year.
Transportation Secretary Arthur P. Tugade said he wants the runway to be operational by November.
In line with the “fast and sure” approach adopted by Manila and Tokyo in the implementation of big-ticket infrastructure projects, Dominguez noted that the Philippine government acted swiftly in processing the necessary requirements for the supplemental loan. He added the loan took only a short period of four months to be formalized: from the time the National Economic and Development Authority (Neda) Board approved the loan on June 19, up to the signing of the deal on Monday.
“Under government conditions, this is amazing speed. I look forward to this becoming the benchmark of efficiency for the other projects in the pipeline,” he said. “With the same dispatch on all public projects, I am confident we will sustain the pace of growth we need to bring the benefits of inclusive growth to our people.”
Dominguez said he considers the project as “a perfect example of a hybrid public-private partnership [PPP] project in which the government takes over the initial phase of the project and later bids out its operations and maintenance aspect to the private sector.”
“If some future government or some future administration needs money, they can actually sell that asset. So while we can get good financing, we are building up our asset base,” he added. “That’s like the savings of the people, which can be tapped if some future administration needs it.”
Through Jica, Japan provided funding support in the amount of ¥10.782 billion, or approximately P5.18 billion ($237 million), for the first phase of the New Bohol Airport, which began construction in 2015 and is dubbed the country’s first international “eco-airport.”
The signing of the supplemental loan accord for the new airport was witnessed by Tugade and Economic Affairs Minister in the Embassy of Japan Makoto Iyori.