MANILA, Philippines — The government is firming up a medium-term framework agreement with the South Korean government that will create a pipeline of flagship infrastructure projects to be financed by official development assistance (ODA) in the next five years, the National Economic and Development Authority (NEDA) said.
NEDA undersecretary for investment programming Rolando Tungpalan said he discussed the framework with representatives of the Korean Ministry of Strategy and Finance (MOSF) and the Export-Import Bank of Korea (KEXIM).
The medium-term framework agreement, which is expected to be signed by the end of the year, will change the way of obtaining ODA loans from South Korea and will provide for greater assistance in pre-investment activities such as the conduct of feasibility studies, he said.
The draft agreement is being reviewed by the Department of Finance, Department of Foreign Affairs and NEDA.
“This departs from the previous project-by-project approach,” said Tungpalan. “Before, there was no framework agreement, we just submit projects and if it is exciting for them, they pick it up. Now we have a medium term agreement that will indicate what the pipeline would be over the next medium-term, 2017-2011.”
MOSF and KEXIM officials, he said, also committed to increase funding and technical support for project preparation activities.
“We also agreed that they will expand their support for project preparation. They said it’s important that we have a pipeline of good quality projects and we told them we have a list of projects for which feasibility study would still have to be prepared,” Tungpalan said.
Once finalized, the framework will identify the list of projects that will be supported by ODA and will indicate the amount that Korea will set aside for the Philippines over the next five years.
Among the flaghip projects that will be covered by the medium term framework is the P9.2-billion New Cebu International Container Port project which was approved for financing by KEXIM in the first half of the year. The project, which involves the construction of a new sea port in Consolacion, Cebu, is expected to lessen the congestion in the existing Cebu International Port in Cebu City.
Other than infrastructure, the South Korean government has also committed to increase support for information and communication technology (ICT) and rural development projects in the country.
Outside of the medium term framework agreement, KEXIM has extended loans for other projects under individual loan agreements. These include the P4.9-billion Panguil Bay Bridge Project in Mindanao in 2016 and the P11-billion Jalaur River Multi-purpose Irrigation Project in Iloilo.
KEXIM also extended in 2012 a $71.6-million loan for the upgrade of the Puerto Prinsesa International Airport and in 2011 extended a $13.2-million loan for building the operational capacity of the Laguindingan airport in Minsamis Oriental.