RP to borrow $650 million from WB, JBIC

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has approved two concessional loans of the government worth $650 million from a unit of the World Bank (WB) and the state-run Japan International Cooperation Agency (JICA). 

BSP officer-in-charge Armando Suratos told reporters that the central bank has given its final approval on the $400-million loan being obtained by the Philippine government from the WB’s International Bank for Reconstruction and Development.

Suratos said the loan would be used to bankroll the Social Welfare and Development Reform Project (SWDRP) of the Department of Social Welfare and Development (DSWD) aimed at advancing the government’s social protection reform agenda.

He pointed out that the project would also help improve outcomes of the social welfare and development services by strengthening the effectiveness of DSWD as a social protection agency to efficiently implement the Pantawid Pamilyang Pilipino Program and to expand an efficient and functional National Household Targeting System.

The loan would be payable in 25 years inclusive of a 10-year grace period and would carry a front-end fee of 0.25 percent of loan amount as well as six month’s US dollar LIBOR plus applicable variable spread. 

Likewise, Suratos announced that the policy setting body of the BSP has approved in principle two loans worth $250 million to be provided by JICA to finance Development Policy Support Program (DPSP) subprogram 3 being undertaken by the Department of Finance (DOF). 

The first loan which will be co-financed by the Asian Development Bank (ADB) is worth $100 million payable in 30 years including a 10-year grace period with an interest rate of 1.4 percent per annum. 

The second loan, on the other hand, worth $150 million is coming from the emergency budget support Japanese official development assistance (ODA) loan. It would carry an interest of six month Japanese Yen LIBOR payable in 15 years including a three-year grace period.

Suratos said both loans would involve a commitment fee of 0.1 percent per annum based on the amount disbursed accruing 120 days after the date of the signing of the loan agreements.

He added that the program intends to improve fiscal sustainability, maintain macroeconomic stability and improve credit worthiness. 

He also pointed out that the program would also help enhance governance in public financial management and at the same time speed up disbursements for critical public spending.

Other benefits of the program include the improvement of the country’s investment climate and rural development as well as the enhancement of human capital and social inclusion.