THE Japanese government has been one of the country’s largest sources of official development assistance (ODA).
Through the years, the Japanese government has helped finance many of the country’s largest infrastructure projects, including the 3,500-kilometer Philippines-Japan Friendship Highway, later renamed the Pan-Philippine Friendship Highway. Also known as the Maharlika Highway, the first national arterial road that connected Luzon, the Visayas and Mindanao, it was built during the Marcos administration.
Light Rail Transit (LRT) Lines 1 and 2 were also both funded by the Japanese. In terms of airports, the old Mactan City airport in Cebu and the Ninoy Aquino International Airport (Naia) Terminal 2, or the Centennial Terminal, were funded by ODA extended by the Japan Bank for International Cooperation (JBIC).
Previously, the JBIC handled all ODA loans extended by the Japanese government, while the Japan International Cooperation Agency (Jica) managed its ODA grant program. In 2008, however, the reorganization of the JBIC resulted in the transfer of all its ODA functions to Jica.
With that, Jica is now considered the world’s largest bilateral aid agency, with its volume of cooperation amounting to about $16.4 billion for Japan fiscal year 2016 and a worldwide network of about 100 overseas offices, including the Philippines.
Locally, Jica’s history began in 1966—four years after the Japanese government established the Overseas Technical Cooperation Agency (OTCA), through the first dispatch of members of the Japan Overseas Cooperation Volunteers to the Philippines.
Technical cooperation, assistance
BETWEEN 2011 and 2015 data from Jica revealed that it had disbursed a total of ¥27.16 trillion, or P13.15 trillion for loans extended to the Philippines. This is on top of the ¥2.8 trillion, or P1.4 trillion worth of grants; and ¥2.39 trillion, or P1.2 trillion worth of technical cooperation/assistance.
In 2016 the ODA Portfolio Review released by the National Economic and Development Authority (Neda) showed that Jica had the largest share in the ODA portfolio representing 36 percent, or $5.62 billion.
Such covered only 31 projects. The Neda’s monitoring and evaluation only included those that go through the Investment Coordination Committee (ICC), which has a project cost threshold of P2.5 billion. This means only projects amounting to the said amount and those above it are subject to ICC approval.
However, Jica data showed that as of February 2018, there are over 100 Jica-funded projects nationwide. These are divided into three major groupings: (1) achieving economic growth through further promotion of investment, (2) overcoming vulnerability and stabilizing bases for human life and production activity, and (3) peace and development in Mindanao.
Under the first major grouping, there are economic infrastructure projects that pertain to those Jica is funding to help the Philippine government usher in its “Golden Age of Infrastructure.”
Quality transport infra
THIS comes as no surprise since the Japanese government “has supported quality transport infrastructure in the Philippines since the 1970s, with 45 percent of its ODA loan portfolio channeled to supporting infrastructure even in the remotest areas.”
These undertakings include the Metro Manila Priority Bridges Seismic Improvement Project and the Davao City Bypass Construction Project, where Jica extended ¥33.689 billion, or P16.85 billion worth of assistance.
Said projects have an interest rate of 0.1 percent for civil works and 0.01 percent for consulting services. The repayment period for both projects is 40 years, while the grace period is 10 years. The procurement for both projects is for Japanese firms, since the loans are tied to them.
Both projects will be subject to the Special Terms for Economic Partnership as Japanese technologies, including seismic strengthening, neighboring/proximity construction, as well as excavation techniques for tunnel construction will be applied.
The Japanese government will extend ¥9.78 billion for the Metro Manila Priority Bridges Seismic Improvement Project, which aims to reinforce earthquake resistance for two major bridges in the National Capital Region.
Not only because of physical conditions, but Jica said that due to the magnitude of earthquakes in the region and geotechnical factors, key bridges for transportation and logistics in Metro Manila require seismic strengthening or replacement.
The project will replace or reinforce the Guadalupe and Lambingan bridges, which are determined as high priority for replacement or seismic strengthening due to various factors, such as their location in high-traffic, important routes.
“This will provide the transportation network in Metro Manila with resistance and strengthen the capacity of the area to maintain its urban functions in time of a disaster, contributing to stable and sustainable economic activities in Metro Manila,” Jica said.
Mindanao-based projects
JICA will also extend a ¥23.91-billion loan for the Davao City Bypass Construction Project, particularly in the south and central sections, which aims to realize better access to major ports as well as the City’s center.
From different ports, including Sasa International Seaport as the major export base, Davao City exports agricultural products—the main trade for the island of Mindanao—as well as agricultural and industrial commodities produced by Japanese companies nearby.
Functioning as a gateway to other islands, Davao City is expected to increase its importance as the driving force for economic growth in Mindanao going forward.
However, traffic congestion has become a serious problem in the center of Davao City, which is associated with a rise in population density. The occasional gridlocks, combined with other factors such as truck regulations, increase the cost of transportation.
This project will construct a bypass road connecting the southern tip and the heart of Davao City. It is earmarked to improve the paving of existing roads, thereby improving access between ports, including Sasa International Seaport and the city center.
It will also upgrade logistics and lessen traffic congestion in the biggest economy in Mindanao, the core of which is Davao City, with the objective of contributing to economic development in the southern Philippine region.
Fast-tracking Metro transpo
APART from these projects, Jica is also assisting the Philippines in transport projects, such as for railways, including the procurement of 120 new rolling stocks for the LRT Line 1. This is part of the aid agency’s ¥43.25-billion loan for the “Capacity Enhancement of Mass Transit Systems in Metro Manila” project.
The undertaking aims to support quality transport infrastructure in the Philippines to help sustain the country’s robust economic growth.
The LRT Line 1’s new rolling stocks will use Japanese technology and products, as they will also help reduce greenhouse-gas emissions. Once completed, the new rolling stocks of can accommodate 1,388 passengers per train—more than doubling the number currently accommodated by running coaches.
Another major transport project, which Jica will be participating in, is the building of the Metro Manila subway—a first for the Philippines.
In March Finance Secretary Carlos G. Dominguez III signed the ¥104.53-billion ODA loan for the initial construction of the country’s first underground road channel.
Jica’s support for the 25-kilometer Metro Manila Subway Project, which has an estimated total cost of ¥800 billion, complements the Philippine government’s “Build, Build, Build” priorities on erecting infrastructure to attract investments and enhance the mobility of Filipinos. The signed loan agreement amounting to ¥104.53 billion will cover actual demand for the initial years’ funding.
The project, identified in the Jica-Neda Roadmap for Transport Infrastructure Development for Metro Manila and its Surrounding Areas, will connect Mindanao Avenue, Quezon City, in north of Metro Manila, traverse the area of the former Food Terminal Inc., and further extend to the Naia in the south to help address the city’s perennial traffic gridlock.
The subway project is seen as one of the solutions to the rising traffic costs in Mega Manila at P3.5 billion per day as of 2017, which was based on the preliminary results of the Follow-Up Survey on the Roadmap for Transport Infrastructure Development for the Greater Capital Region. Traffic costs pertain to the economic costs of transportation, including vehicle operating costs and time costs spent in traffic in Metro Manila.
These are just some of the key projects that Jica is working on to help the Philippines address its development constraints. Jica also has various projects on disaster management, and its work in Mindanao makes the bilateral donor agency one of the country’s top development partners.
For the Philippine government’s part, the Transportation Department’s Undersecretary for Administration and Finance Atty. Garry V. de Guzman, said the Philippines will greatly benefit from the ODA projects.
“By the time we have already completed the projects, we are using it already, but we have yet to pay Jica. They will really help us a lot, and we are assured of the quality,” de Guzman averred.
(Starting this issue, Envoys&Expats will feature embassies and aid agencies as part of its public information campaign for Mission: PHL.)