PH, Japan ink Y30-B post-disaster standby loan

The governments of the Philippines and Japan, through the Japan International Cooperation Agency (JICA), have signed a new loan agreement that will support the country’s budgetary requirements for post-disaster response and recovery.

In a statement on Tuesday, the Department of Finance (DOF) said Finance Secretary Benjamin Diokno and JICA senior vice President Nakazawa Keiichiro signed the ¥30-billion loan deal for the Post Disaster Stand-by Loan (PDSL) Phase 3 during the Philippines-Japan High-Level Joint Committee Meeting on Infrastructure Development and Economic Cooperation in Tokyo, Japan on August 28.

The ¥30-billion loan seeks to support the swift recovery after natural disasters by promoting policy actions on disaster risk reduction and management (DRRM) and strengthening disaster preparedness by providing quick-disbursing budget support.

The DOF said Japan is the Philippines’ largest official development assistance (ODA) provider of loan and grant commitments amounting to around $ 12.92 billion or about 40.5% of the country’s total ODA portfolio.

The Finance Department added that JICA is currently supporting the implementation of 28 ongoing loans with the Philippine government.

During the high-level meeting, Diokno told Japanese officials that the Philippines will continue to secure concessional terms and conditions through JICA’s Special Terms for Economic Partnership (STEP).

The Finance chief also highlighted Japan’s support to the country’s railway projects which amounted to ¥394.4 billion.

Among the railways projects funded by JICA are the North-South Commuter Railway Project (NSCR), NSCR Extension Project, and the Metro Rail Transit Line 3 (MRT3) Rehabilitation Project.

“Through the years, the Philippines and Japan have enjoyed deep bilateral ties, strengthened by the Japanese Government’s steadfast commitment and continued support to the Philippines’ development agenda,” said Diokno.

Upper-middle income

During the high-level meeting, the Philippine and Japanese officials also discussed the assistance which will be needed by the Philippines to achieve upper-middle income status.

In February, Japan committed ¥600 billion in government aid private sector investments to support the country’s drive to become an upper-middle income economy.

“We are grateful for Prime Minister Kishida’s commitment to support the Philippines’ pursuit of the upper middle-income country status through impactful ODA and private-sector investments,” said Diokno.

The DOF said both countries then discussed available financing options once the Philippines enters upper-middle income status by 2025.

Data from Washington-based multilateral lender World Bank showed that the Philippines’ gross national income (GNI) per capita in 2022 at $3,950, up from $3,550 in 2021.

GNI per capita refers to the total value of a country’s income divided by its population.

The Philippines GNI per capita fell within the WB’s bracket for lower-middle income economies of $1,136 to $4,465.

Similarly, data from the Philippine Statistics Authority showed the country’s GNI per capita stood at P209,012 in 2022, up 14.6% from P182,438 in 2021.

Meanwhile, among the new frameworks discussed by the Philippines and Japan include the "private capital mobilization-type,” a grant that attracts investment, and the "offer-type" that proposes a menu of cooperation that takes advantage of Japan's strengths.

“We hope that Japan will continue to be a strong partner through various forms of bilateral and technical cooperation for many years to come,” said Diokno.—AOL, GMA Integrated News