Saturday, February 18, 2006

Japan ODA loans to RP slow down

By Roderick T. dela Cruz - Manila Standard

Infrastructure investments of the Japan Bank for International Cooperation (JBIC) in the Philippines have tended to slow down due to government’s efforts to reduce its fiscal deficit.

Data showed that the latest Philippine project approved by JBIC was the P3 billion Arterial Road Bypass Project in Central Luzon signed on March 30, 2004.

Worse, the ongoing loan portfolio cleanup between the Philippines and Japan has resulted in the cancellation of previously approved projects such as the Phase 5 of the Metro Manila Interchange Construction Project.

JBIC, the financing arm of the Japanese government providing long-term, low-interest loans to developing countries, accounts for more than two-thirds of the official development assistance (ODA) projects of the Philippines.

Former Cabinet secretaries Benjamin Diokno and Cielito Habito have noted a decline in the government’s infrastructure investment, as a share of the gross domestic product (GDP), over the past few years.

They said such decline in infrastructure spending takes its toll on the country’s competitiveness as an investment destination in East Asia.

From November 1971 to March 2004, JBIC has approved 263 loans, most of which were for infrastructure development amounting to a total of ¥2.001 trillion (approximately P1 trillion).

The Philippine owes JBIC about P475 billion as of 2004.

The 41.931 million yen (around P21 billion) Subic-Clark-Tarlac Expressway project, signed in September 2001, represents the country’s largest ODA loan from JBIC, followed by the ¥40.4 billion (P20 billion) loan for the Calaca 2 Coal-Fired Thermal Power Plant Project signed in September 1987.

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