Philippines borrows another P12.3 billion from Japan for COVID-19 efforts

MANILA, Philippines – The Philippines resorted to borrowing from Japan again to finance the expenses brought about by the COVID-19 pandemic.

On Tuesday, April 26, the Department of Finance (DOF) said the two nations signed an agreement for a 30-billion-yen (P12.3-billion) loan to help the Philippines “rapidly recover from the COVID-19 pandemic and fully return its economy to the path of high, inclusive growth.”

The amount is part of the second phase of the COVID-19 Crisis Response Emergency Support Loan (CCRESL 2), which was signed by Finance Secretary Carlos Dominguez III and Akihiko Tanaka, the new president of the Japan International Cooperation Agency (JICA).

The CCRESL 2 package carries concessional lending terms of a 0.01% fixed interest rate per annum with a maturity period of 15 years, inclusive of a 4-year grace period – the same as with the first 50-billion-yen CCRESL.

The first phase of the CCRESL was signed in July 2021. Part of the amount was used for cash aid.

Other forms of JICA’s support to the Philippines during the pandemic include:

Donation of 3.09 million doses of AstraZeneca vaccines
Budgetary support financing through CCRESL 1 and the second phase of the Post Disaster Standby Loan worth a combined $867 million
COVID-19-related grant aid (cold chain logistics, crisis response, provision of medical equipment) worth $25.18 million

The latest loan brings the Philippines’ total coronavirus-related borrowings to over P1.4 trillion. The DOF earlier said the loans will have to be repaid over a period of 40 years starting 2020 and “will require a fiscal consolidation program and improved revenue collection.” – Rappler.com

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