MANILA — The USD172.64 million loan given by South Korea to the Philippines for the construction of the proposed New Cebu International Container Port is a “very generous” loan, Department of Finance (DOF) Secretary Carlos “Sonny” Dominguez III said Tuesday.
Dominguez said that the agreement between the two countries was signed on Monday (June 4) and was witnessed by Philippine President Rodrigo R. Duterte and South Korean President Moon Jae-in.
“I am pleased to announce that yesterday (Monday) the loan agreement for this project was signed by myself and Export-Import Bank Korea Chairman and President Sung-Soo Eun,” Dominguez said.
The USD172.64 million loan will be used to finance the new Cebu International Container Port project, a container port which will increase the operational capacity of the main cargo way in Cebu.
Moreover, it will help alleviate the road congestion in the Cebu-based port area and provide a more efficient and reliable transport infrastructure to enhance the flow of goods and services in the Visayas.
He described South Korea as “very generous” for providing the loan, noting that the Philippines could easily afford to pay it back once the port is constructed.
“The interest rate on this 172 million US dollars is 0.15 percent and it is payable over 40 years, ten years grace period,” Dominguez said in a press conference in Seoul, South Korea.
“So it is very, very generous of the Korean government. And certainly we can afford this kasi (because), you know, when they put the port we will be charging port charges and goods will flow more quickly, traffic will be lessened in Cebu. So, it’s really beneficial for us. And the loan is very, very, very cheap,” he added.
This loan is part of the USD1 billion Official Development Assistance (ODA) of South Korea signed between the two countries last month.
South Korea has doubled the ODA committed to the Philippines from USD500 million from 2011 to 2013 to USD1 billion available from 2017 to 2022.
Dominguez vowed to we maximize the amount and keep it free from corruption.
“It is our duty to make sure those funds are totally corruption free. We are monitoring these projects very carefully. We are getting COA (Commission on Audit) involved in the audit of these projects,” Dominguez said.
“Of course the President has really taken it upon himself to fire people who are just suspected of corruption so in this way we feel that the government employees as well as the private sector will be very careful in the use of government funds and funds from the taxpayers of other countries,” he added.
Meanwhile, Dominguez said that three projects in the immediate pipeline under the ODA include a USD50 million project preparation facility for the National Irrigation Administration (NIA); USD100 million financing for the New Dumaguete Airport Development Project; and USD41 million for the implementation of Electronic Receipt Invoices and Sales Reporting System that will monitor all taxes paid by retailers in the Philippines.
Dominguez said he will also be recommending the remaining US 636 million to two or three of the flagship infrastructure projects identified in the “Build, Build, Build” program.