THE Philippines secured from the Japanese government on Wednesday a 50-billion yen (P23.5 billion) loan that will be used for budgetary support in the fight against the coronavirus disease 2019 (Covid-19) pandemic.
Finance Secretary Carlos Dominguez 3rd and Japan International Cooperation Agency (JICA) Chief Representative Eigo Azukizawa signed the agreement for the Covid-19 Crisis Response Emergency Support Loan at the department’s head office in Manila.
“Consistent with the demands of this time, and in line with our ‘fast and sure’ approach to development financing, the Philippines and Japan moved quickly in achieving this emergency support loan,” Dominguez said after the signing.
He underscored that the Japanese loan requires no policy conditions prior to disbursement unlike regular policy-based loans, and will be immediately available for withdrawal the moment it is declared effective.
The Finance chief added that the loan was very important as the government’s response to the Covid crisis will more than double its budget deficit this year on the back of lower tax collections amid higher public spending for healthcare and social relief programs.
“We also need to fund our economic recovery program. This will require us to bridge the wider budget gap with additional borrowings. This facility will help us cover our budget expenditures during this very challenging time,” he said.
Dominguez said the loan has an annual interest rate of 0.01 percent and will be repaid within 15 years inclusive of a 4-year grace period.