MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has approved the proposed $100-million loan for agrarian reform communities, to be funded by the Asian Development Bank (ADG) and the Oil and Petroleum Exporting Countries (OPEC).
The final approval came last week, paving the way for the eventual release of the funds for phase two of the Agrarian Reform Communities project covering 32 provinces in 14 regions.
BSP Deputy Governor Diwa Guinigundo said over the weekend that $70 million of the loan package would be funded by the ADB while the remaining $30 million would be funded by the OPEC.
Guinigundo said ARCP II would continue the work undertaken under ARCP 1 which started in 1998 and assisted 165 agrarian reform communities in 35 provinces.
Guinigundo said ADB would fund the loan out of its ordinary capital resources (OCR) and OPEC would get the $30 million from its Fund for International Development (OFID).
ADB’s OCR loan would have a 25-year repayment period, including a grace period of five years, and an interest rate based on the ADB London interbank offered rate-based lending facility.
The OFID loan, on the other hand, will have a 20-year maturity, with a five-year grace period, a one-percent service charge and a three-percent interest rate.
Guinigundo said the project would help train agrarian reform beneficiaries participate in infrastructure programs and agribusiness activities.
The project would also target capacity building for organizations of agrarian reform, improve rural infrastructure and distribution networks, including farm-to-market roads, bridges, small-scale irrigation systems and post-harvest facilities.
It will likewise provide technology and extension support to assist farmers boost the productivity of their crops as well as partner with micro-finance institutions and nongovernment organizations to develop new agri-enterprises and markets.
The loan would form part of the National Government’s official development assistance (ODA) borrowing this year which was estimated to amount to over $1 billion.
The World Bank alone estimated that its Philippine Country Assistance Strategy (CAS) could amount to at least $987.36 million in fiscal year 2009, including the $200-million loan for the Food Crisis Response Development Policy Operation; $390 million to $400 million for the National Sector Support for Social Welfare and Development Reform Project; and $260 million for the Light Rail Transit Line 1 south extension project.