MANILA, Philippines - Despite suffering one of its worst natural disaster-related crisis in Japanese history, the Japan International Cooperation Agency (JICA) is extending a new 25-year loan worth $500 million to finance the National Government's various road projects.
The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has given its approval in principle for the government to negotiate the terms and rates of the JICA loan equivalent to ¥40.85 billion or P22 billion.
The 25-year loan will carry an interest of 1.4 percent per annum plus seven years grace period.
The loan will fund the NG's Road Upgrading and Preservation Project. The implementing agency will be the Department of Public Works and Highways.
Sources confirmed that the Monetary Board has approved in principle the JICA loan facility last week.
The Japanese and Philippine governments have officially signed official development assistance or ODA agreements last January.
The road projects will cover nationwide arterial roads and will help the DPWH to improve road maintenance and management capability.
The project is Japan's first ODA loan for the Philippines under the Aquino Administration. It was pledged at the first meeting between Japanese Prime Minister Naoto Kan and President Benigno S. Aquino III last October in Vietnam.
Japan remains one of the Philippines' biggest sources of ODAs. Its major funding projects includes the 2,100-kilometer Aparri to Davao Philippine-Japan Friendship Highway, and the 94-kilometer Subic-Clark-Tarlac Expressway connecting the Subic Bay Freeport and Special Economic Zone in Zambales.
Last year, when the country was still reeling from the effects of tropical storms ''Ondoy'' and ''Pepeng'', JICA extended a $100 million to fund short term infrastructure rehabilitation projects.
The 40-year loan has an interest rate of 0.01 percent per year, plus a 10-year grace period. JICA's project included repairs of destroyed bridges and the reconstruction of damaged flood control facilities. The focused areas were mostly Luzon, Palawan and Mindoro Islands.
