South Korea offers to fund Philippine infrastructure projects
MANILA, Philippines – Export-Import Bank of Korea (KEXIM), the official export credit agency of South Korea, expressed willingness to allocate $1 billion in concessional loans over 6 years for possible funding of some key infrastructure projects in the Philippines.
The National Economic and Development Authority (NEDA) said in a statement on Wednesday, June 7, that representatives of KEXIM met with the Philippine government to discuss their proposed concessional loans for some Philippine public infrastructure deals.
Among the Philippine agencies consulted were NEDA, Department of Finance, Department of Transportation, Department of Energy, Department of Agriculture, Department of Public Works and Highways, Department of Information and Communications Technology, National Irrigation Administration, and National Electrification Administration.
Although NEDA did not divulge specifics, the agency said transportation, information and communications technology, and energy infrastructure were identified as priority areas in the proposed cooperation, considering South Korea's comparative advantage in these sectors.
NEDA Undersecretary Rolando Tungpalan welcomed South Korea's offer of assistance, noting that this will boost the Philippine government's efforts to carry out its massive infrastructure program, which requires roughly P8.4 trillion.
"We need to be ambitious, and at the same time we need to scale up our implementation capacity. Financing this 6-year infrastructure program will be sourced from domestic resources, Official Development Assistance, and public-private partnership programs," Tungpalan said.
Aside from concessional loans, KEXIM is also offering a knowledge-driven economic cooperation program that will enable South Korea to share its successes and failures and propose applicable policy recommendations.
KEXIM also expressed willingness to assist in the Philippines' pre-investment activities, including project preparation, feasibility studies, and plans formulation, through the bank's Project Preparation Facility.
The Philippines and South Korea are set to finalize the framework agreement in August.
The NEDA Board's Investment Coordination Committee (ICC) last week approved the Mindanao Railway Project's Tagum-Davao-Digos segment, North-South Railway Projects (NSRP)-South Line, and Malolos-Clark Railway projects.
These projects will need the approval of the NEDA Board, which is chaired by President Rodrigo Duterte, before they get rolled out by the implementing agencies.
Slow implementation of big-ticket infrastructure projects is taking a toll on the country's economic growth, which slipped to 6.4% in the 1st quarter of 2017, its slowest pace in over a year. (READ: PH economy grows slower by 6.4% in Q1)
The Duterte administration's "Build, Build, Build" program has yet to break ground and lift the economy, leaving the private sector to fill the void.
Public construction grew by only 2% in the 1st quarter of 2017, compared to 38.5% growth registered in the same period a year ago. – Rappler.com