Japan releases final P4.6 billion loan tranche for Philippines pandemic response

MANILA, Philippines — The Philippines has formally received P4.59 billion in loans, the final tranche from the total P22 billion, from the Japanese government to boost the country’s COVID  response.

The Japan International Cooperation Agency (JICA), Japan’s bilateral aid agency, yesterday released 10 billion Japanese yen  or P4.59 billion  under the Post-Disaster Standby Loan Phase 2 (PDSL 2).

This is the fourth and final tranche of the PDSL 2, intended to supplement the government’s response measures in times of catastrophes and health emergencies.

The disbursement request from the Philippines came following the reimposition of enhanced community quarantine in Metro Manila and other provinces last Aug. 6.

Japan said this would support vulnerable sectors and enhance institutional health capacities amid the surge in COVID  cases due to the Delta variant.

“The allocation of the remaining portion of the PDSL 2 will be used for the Philippines’ pandemic response and recovery interventions such as the provision of emergency subsidies and strengthening of preventive mechanisms,” the Japanese government said.

PDSL 2 is a contingency fund that allows the Philippines to withdraw up to JPY 50 billion (P22 billion) worth of loans to help finance the government’s response measures in the aftermath of natural and health-related disasters.

The PDSL 2 was signed in September 2020 between JICA and the Department of Finance.

The first tranche worth JPY 10 billion (P4.39 billion) was made available in October 2020 following the extension of the state of calamity in the country due to COVID-19.

The same amount under the second tranche was released last January following the state of calamity declaration in Luzon due to Typhoons Quinta, Rolly and Ulysses.

Another JPY 20 billion (P8.78 billion) was provided in June to augment the government’s pandemic  war chest.

“We have high hopes that the PDSL 2 served its purpose as a quick-disbursing budgetary support that would open the way for the Philippines to fully recover from the impact of the current pandemic,” the Japanese government said.

The loan has a repayment period of 40 years including a grace period of 10 years, with a fixed interest rate of 0.01 percent per annum.