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Press Releases

March 30, 2012

Signing of ODA Loan Agreements with the Republic of the Philippines
–Assistance for Growth through Infrastructure and Overcoming Vulnerability–

Mr. Izumi Arai, Vice-President, JICA (left) and
Mr. Manuel M. Lopez
Ambassador Extraordinary and Plenipotentiary of the Republic of the Philippines to Japan
shook hands after signing loan agreements.

1. Today, the Japan International Cooperation Agency (JICA) signed loan agreements with the Republic of the Philippines to provide loans of up to 68.263 billion yen for seven projects.

2. The Philippines is gathering attention of investors as a rapidly growing country with the GDP growth rate of 7.6 percent in 2010. Although the growth slowed down in 2011 due to, among others, European debt crisis, it is expected to continue steadily at the rate of 4.2 percent in 2012. To promote sustainable economic development, the Philippine Government prioritizes infrastructure development as one of the most important policies to attract more foreign and domestic investment.

3. Under such circumstances, the Japanese ODA loans signed today will support strong economic growth of the Philippines through the development of infrastructure and improvements in measures to counter vulnerabilities such as disaster risks and unstable food supply.

(1) Economic growth by formation of industrial space and logistics improvement
Industrial space is expanding from Metro Manila to northward and southward, because space for further development is scarce and traffic congestion is severe in Metro Manila. The Philippines Government is promoting expansion of industrial space to Central Luzon through northward expansion of Subic-Clark-Manila-Batangas Corridor. As Central Luzon is located within 100 kilometer north from the center of Metro Manila, further development in the region is expected. There is, however, no highway to connect the east and west sides of the region have been existing, and smooth transportation in the region has not been realized. JICA supports the construction of a highway in the region through Central Luzon Link Expressway Project in order to support the development of the region and improve physical distribution between the region and Metro Manila.

Furthermore, JICA supports the construction of a bypass road adjacent to Plaridel City, which is one of the most congested areas along Philippine-Japan Friendship Highway connecting Metro Manila and major suburban cities, in order to decongest traffic situation in the vicinity of Metro Manila and improve physical distribution. (Arterial Road Bypass Project (Phase II)).

(2) Support for disaster risk reduction
The Philippines is one of the most natural disaster prone countries in the world and has suffered large scale damages every year especially from typhoons. Risks of flooding caused by typhoons may increase due to the climate change. The Philippine Government urgently needs to respond to the risks by taking necessary measures against floods especially in highly populated areas. To address this issue, JICA supports the implementation of measures against floods along Pasig-Marikina River flowing through the center of Metro Manila, which is the center of economic activities (Pasig-Marikina River Channel Improvement Project (Phase III)), and outside Metro Manila including Cagayan River basin (northern Luzon), Tagoloan River basin (northern region of Mindanao) and Imus River basin (adjacent to the southern part of Metro Manila), which are important areas in terms of food supply and economic development (Flood Risk Management Project for Cagayan River, Tagoloan River and Imus River). Moreover, JICA supports the strengthening of forestland management through implementing community based forest management, and thereby improving forest conservation and contributing to disaster risk mitigation efforts in vulnerable areas (Forestland Management Project).

(3) Overcoming vulnerabilities through stable food supply
The Philippines has become the largest rice importer in the world due to the insufficient domestic production compared to rapid population growth. Although increase of domestic rice production has been a priority policy of the Philippine government, rice supplies are still in shortage. To address this issue, JICA supports improvement of rice productivity through the rehabilitation of irrigation facilities, strengthening of irrigators associations, and agricultural support services(National Irrigation Sector Rehabilitation and Improvement Project).

Furthermore, JICA supports the improvement of agricultural productivity and income of small scale farmers through provision of small scale agricultural infrastructure and agricultural/organizational capacity building in the Mindanao region, which has a rich agricultural potential with vast land area and stable climate (Mindanao Sustainable Agrarian and Agriculture Development Project).

4. The relationship between the Philippines and Japan has deepened in the recent years. Both countries confirmed to strengthen bilateral cooperation by issuing a joint statement "Japan-Philippines Joint Statement on the Comprehensive Promotion of the Strategic Partnership" when President Aquino visited Japan in September 2011.

5. JICA will continue to support the development agenda of the Philippines through a variety of modalities of ODA loan, technical cooperation, and grant aid assistance.

Reference

1. Terms and Amounts of Loan

Project titleAmount (million yen) Annual interest rate (%)Repayment (years)Grace Period (years)Procurement
ProjectConsulting services
(1) Central Luzon Link Expressway Project22,7961.400.013010Untied
(2) Arterial Road Bypass Project (Phase II)4,5911.400.013010
(3) Pasig-Marikina River Channel Improvement Project (Phase III)*11,8360.200.014010Japan tied
(4) Flood Risk Management Project for Cagayan River, Tagoloan River and Imus River7,5461.400.013010Untied
(5) Mindanao Sustainable Agrarian and Agriculture Development Project6,0631.400.013010
(6) National Irrigation Sector Rehabilitation and Improvement Project6,1871.400.013010
(7) Forestland Management Project**9,2440.30.014010
Total68,263 

* Special Terms for Economic Partnership (STEP) is applied.
**Climate change condition is applied.

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