Korea Offers $1.7 Billion Credit Facility & $7 Million Non-Lending Programs to the Philippines

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The government of South Korea confirmed that they offered a $1.7 Billion Credit Facility and another $7 Million in the form of non-lending programs to the Philippines to help implement the Duterte administration’s priority programs in the Transport, Information and Communications Technology, and Energy Sectors.

The $1.7 Billion and the $7 Million financial instruments would be made available by the South Korean government through the Export-Import Bank of Korea (KEXIM), which manages its Economic Development Cooperation Fund (EDCF), an official development assistance facility.

Based upon the information released by the Department of Finance (DOF), among the financial tools that the Philippines can tap from South Korea is a $100-million credit line for a Project Preparation Facility, which is available at zero interest and payable in 40 years (inclusive of a 10-year grace period).

The KEXIM credit line can also be tapped via a tied loan facility with South Korean companies entering into joint ventures with Philippine local firms.

The DPWH and NIA can tapped the Project Preparation Facility for its infrastructure projecs according to the report submitted by the DOF’s International Finance Group to Finance Secretary Carlos Dominguez III.

“A country program mission from KEXI-EDCF that was here from August 29 to 31 met with Philippine officials and identified the priority sectors of ICT, transport and energy for possible loan assistance from South Korea,” said IFG in its report during a recent DOF Executive Committee (Execom) meeting.

Aside from the NIA and DPWH, the other agencies with identified projects in the pipeline for the KEXIM loan facility are the Department of Information and Communications Technology (DICT), Department of Agriculture (DA), Department of Transportation (DOTr) and the National Electrification Administration (NEA), the IFG told Dominguez during the Execom meeting.

The signing ceremony of the highly anticipated grants to the Philippines from Korea will take place on the sidelines of the 2017 summit of the Association of Southeast Asian Nations (ASEAN) in Manila.

South Korean President Moon Jae-in is already in the Philippines to attend the ASEAN Summit as one of the members of the ASEAN Partners.

Source: PIA

Ed Umbao

Founder of PhilNews.xyz | co-Founder of PhilNews.ph

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