FRG cancels RP’s P372-million debt

The Department of Environment and Natural Resources announced yesterday that The Federal Republic of Germany has cancelled part of the country’s debt for a nature swap program in exchange for the successful implementation of a forestry project in Quirino province.

Elisea Gozun, DENR secretary in a press statement said that for instituting a successful community-based forestry program for upland communities, the FRG has written off the country’s remaining debt amounting to $7.087 million or P371.91 million.

"I understand the German government is very much interested on how we handled this project successfully since this is the first German debt for nature swap program in the forestry sector nationwide. This project is now being eyed by international communities as model for similar programs," Gozun said. She said the debt cancellation was a result of the RP-German Consolidation Agreement signed on June 30, 1992 under the debt for nature swap initiated program and the separate agreement signed on Oct. 31, 1996 for the implementation of the Quirino forestry project by the DENR.

In a letter to the Philippine government, the Germany Financial Cooperation Agency formally cancelled the loan including the interest accrued on the debt after it has found the Quirino project a success.

The agreement calls for the writing off of the debt through the utilization of 30 percent of the debt as funding for the project.

"Instead of paying about P82.5 million they allow us to use this amount to implement the Quirino project instead. We will try to look into the seminar debt for nature schemes with the other countries to reduce our country’s debt, ensure sustainable management of the environment and help local communities at the same time," Gozun said.

The Quirino forestry project was implemented from July 1999 to March in 10 barangays in the towns of Madella, Nagtipunan, Aglipay and Diffun, with the end view of "implementing measures for the protection of environment and sustainable use of natural resources base with emphasis on bio-diversity conservation, sustained by local communities."