Special reconstruction commission considering $15-billion credit from China

MANILA, Philippines - The Special National Public-Private Reconstruction Commission is considering the $15-billion commercial credit from China as one of its options in financing reconstruction and rehabilitation projects after the devastation caused by back-to-back typhoons that hit the country, Malacañang said in a statement yesterday.

The government said earlier, however, that it prefers to raise the estimated $1 billion needed for reconstruction through grants or concessional loans. It will avail of a commercial loan as a last resort.

The commercial credit from China will be available to the 10 member nations of the Association of Southeast Asian Nations (ASEAN) in the next three to five years.

China announced during the 12th ASEAN-China Summit held at the sidelines of the 15th ASEAN Summit in Thailand on Saturday that it will raise the preferential part of the commercial credit by $5 billion to show its support for ASEAN-China cooperation.

China is ASEAN’s fourth largest trading and investment partner, accounting for 10.6 percent of the region’s total trade.

In 2008, trade volume between ASEAN and China reached $231.1 billion. China’s direct foreign investment in the region reached $2.18 billion in 2008, up by 125 percent from 2007.

President Arroyo, who arrived in Thailand on Saturday, also proposed that the release of funds from the $120 billion Chiang Mai Initiative Multilateralization (CMIM) to a distressed ASEAN member must be fast and done with less conditions.

At the Asia-Europe meeting in Beijing in December last year, ASEAN member states plus China, Japan, and South Korea agreed to increase the emergency fund from $80 billion to $120 billion.

The expanded fund will be launched at the end of the year.

The CMIM was pooled to assist ASEAN Plus 3 countries experiencing liquidity shortfalls and short-term balance of payment difficulties.

It is expected to “ help restore confidence and enhance the ability to address the impact of the financial and economic crisis.”

China and Japan will contribute 32 percent each to the fund while South Korea will supply 16 percent. The rest will be pooled by ASEAN member states Philippines, Thailand, Indonesia, Malaysia, Singapore, Brunei Darussalam, Myanmar, Cambodia, Laos, and Vietnam.

Meanwhile, the President received Thailand’s commitment to donate 620 metric tons of rice for the victims of tropical storm “Ondoy” and typhoon “Pepeng.”

During the working lunch, Thai Prime Minister Abhisit Vejjajiva handed the President a handful of rice grains as a symbol of the donation.

The Thai Ministry of Foreign Affairs assured that 100 metric tons of rice, as well as medicines, will be sent to the Philippines by the end of the month.

Thailand also pledged 520 metric tons of rice to the ASEAN Plus 3-East Asia Emergency Rice Reserve by February next year.