Japan provides $1-B loan for Philippines subway, other projects
Posted 7 years ago
TOKYO – Japan will provide close to P60 billion in loans to the Philippines to support three key infrastructure and development projects, including the establishment of a subway system in Metro Manila.
By Alexis Romero
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| President Duterte talks with Japanese Emperor Akihito as his partner Honeylet Avanceña talks with Empress Michiko at the Imperial Palace in Tokyo yesterday. Returning to Davao City last night, Duterte said he was impressed with the simplicity of Japan’s royal couple. |
Statements from the Japanese foreign ministry said the 129.857-billion-yen ($1.143-billion) assistance forms part of the 1-trillion-yen financial package for Philippine development projects pledged by Japan last year.
Japanese Prime Minister Shinzo Abe committed to provide the loan on the first day of President Duterte’s visit here.
Trade Secretary Ramon Lopez said the terms of the loans are friendly, citing the robust ties between the Philippines and Japan.
“It’s really development assistance. It’s like giving a friend a very good deal,” Lopez told reporters yesterday. “It’s like a friend helping another friend.”
As much as 104.53-billion yen may be given to support the first phase of the Metro Manila Subway Project.
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The project seeks to help address traffic congestion in Metro Manila, ease air pollution and promote investments in the Philippines.
The interest rate for the loan is 0.1 percent per annum while the repayment period is 28 years after a 12-year grace period.
About 800-billion yen (P356 billion) is needed to complete the subway project. Presidential spokesman Harry Roque said Japan may extend as much as $6 billion or about 600-billion yen in loans for the subway.
“There is a commitment from Prime Minister Abe himself about a $6-billion investment in a subway in the Philippines. This will be a tremendous help to the traffic problem in the country,” Roque said.
“A subway is long delayed. I’m very glad to announce that in this trip, the $6-billion investment was formalized,” he added.
Part of the multibillion-peso loan will also fund the third phase of the arterial road bypass project, which costs about 9.399-billion yen.
The project seeks to help relieve traffic congestion and improve transportation capacity and efficiency in Plaridel City by building a bypass road along the Philippine-Japan Friendship Highway. The highway directly links Metro Manila with Central Luzon.
The interest rate for the road bypass project is 1.5 percent per annum while the repayment period is 20 years after a grace period of 10 years.
Japan is also providing a 15.928-billion yen loan to fund the Cavite Industrial Area Flood Risk Management Project, which is expected to reduce flood damage in the province.
Foreign Affairs Secretary Alan Cayetano and Japan Foreign Minister Taro Kano exchanged notes on the project loan in the presence of Duterte and Abe last Monday.
The rate of interest for the loan is 0.3 percent per annum while the repayment period is 30 years after a 10-year grace period.
Currency conversion
Roque said Japan has also announced an agreement allowing the conversion of yen to Philippine peso.
“The peso and yen are now convertible. That will be of tremendous help to OFWs (overseas Filipino workers) because they lose money when they convert to dollar first before converting to peso,” Roque said.
Roque said Japan is also looking into investing $2 billion in a liquefied natural gas facility in the south.
The Japanese government has also committed to provide the Philippines 40 patrol boats to strengthen its maritime defense capacity, he added.
Roque said the assistance provided by Japan had nothing to do with maritime disputes in the region. There were speculations that Japan is assisting the Philippines to solicit support on its own dispute with China over the Senkaku Islands in the East China Sea.
“I do not see why there is an ongoing race between China and Japan,” Roque said.
“There’s a policy of a veer towards Asia and I think the ever improving ties between Asian countries, including both Asia and Japan, is a proof that we are not favoring one Asian country as against another,” he added.
Roque said the giving of assistance by Japan is part of “soft diplomatic policy.”
“As Filipinos, we welcome all countries to be our friends as well. But I’m not aware of any reciprocal obligation imposed on us. It was freely given to us, of course it’s an investment,” Roque said.
“And I think as far as the Japanese government and Japanese businesses are concerned, they consider the Philippines as a viable destination for their investments,” he added. Roque said the Philippines can give back to Japan by being a “good friend.”
Business deals
A total of 18 business deals have been signed during Duterte’s two-day visit here.
The agreements can generate $6 billion worth of new investments. The trade department signed agreements with Marubeni Corp., Itochu Corp., Sumitomo Metal Mining Co. Ltd., Taiheiyo Cement Corp., Tsuneishi Shipbuilding Co. Ltd., Ministop Co. Ltd. and Lawson Inc.
The Subic Bay Metropolitan Authority signed deals with List Co. Ltd., Newcoast Southbeach Realty Inc. and Subic Smart Community Corp.
Japan Tobacco Inc. inked an agreement with the finance department while Tokyo Gas Co. Ltd. signed a deal with the energy department.
Hitachi Asia signed an agreement with Bases Conversion and Development Authority while Ubicon Holdings Inc. inked a deal with Advanced World Solutions Inc. and Alsons/AWS Information Systems Inc.
Densan System Co. Ltd. signed a deal with CIS Bayad Center Inc. while Hitachi Ltd. and Nuclear Energy Business Unit Koji Tanaka inked an agreement with Meralco.
Nomura Real Estate Development Co. Ltd. and Isetan Mitsukoshi Holdings Ltd. inked an agreement with Federal Land Inc.; Yamato Kogyo forged an agreement with Steel Asia Manufacturing Corp. while Itochu Corp. inked a deal with Metro Pacific Investments Corp.
Promise fulfilled
Meanwhile, Sen. Joseph Victor Ejercito expressed confidence Japan will fulfill its promises to help develop the country’s infrastructure.
Ejercito, vice chairman of the Senate committee on public service, joined President Duterte’s official delegation to Japan.
He said he was “super happy” and grateful to the commitments made by the Japanese government, particularly on funding a subway in Metro Manila and assisting in the rehabilitation of Marawi City.
“With their pledge to undertake subway project for Metro Manila, I am very, very happy! It is like a dream come true for me! Have been advocating this (subway) for the longest time,” Ejercito told reporters.
He said Abe told Duterte the subway could be partially operational before the end of the term of Duterte.
He recalled Japan during the time of prime minister Obuchi committed to his father, then president Joseph Estrada, that Tokyo would help build SCTEX and some airports and it delivered on its promises.
“So I am confident Japan will honor its pledges and commitments,” Ejercito said, adding it appeared that Abe “loves the Philippines.”
Ejercito earlier filed a bill seeking to establish the Mindanao railway system. He said while putting up new commuter and cargo lines will be very expensive, the benefits to the economy will pay for their cost many times over.
“Trains will greatly reduce the cost, and speed up the transport of goods and people, aside from easing congestion,” Ejercito said.
He said he hopes that train lines from Manila to Malolos, Bulacan; Calamba, Laguna; Laguna; and to Sorsogon will be developed. He also pushed for metro railways in Cebu and Panay
Source: philstar.com
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