The Philippines and Japan governments on Wednesday signed an agreement over a JP¥50-billion (about P23 billion) loan to support the Philippine government’s response and economic relief efforts amid  the COVID-19 pandemic.

The loan was signed by Finance Secretary Carlos Dominguez III, on behalf of the Philippines, and Japan International Cooperation Agency (JICA) Chief Representative Eigo Azukizawa, representing the government of Japan, in Manila.

The JP¥50-billion COVID-19 Crisis Response Emergency Support Loan (CCRESL) was the quickest that was ever secured under Japan’s Official Development Assistance (ODA) financing package and in keeping with the “fast and sure” approach adopted by the two countries since 2017, according to the Philippine government.

Dominguez said the quick processing of the loan deal was due to the Philippines’ urgent need for budgetary support to address the COVID-19 emergency.

The CCRESL was approved by the Development Budget Coordination Committee (DBCC) last June 10 and was processed by the approving authorities of both countries in only 14 working days until the signing of the loan accord at the DOF, the Finance department said.

The loan, as a general budgetary support co-financed with the Asian Development Bank (ADB), is designed to strengthen the country’s capacity to respond to COVID-19 and revitalize economic activities largely hit by the pandemic.

It is the first budgetary support extended by the JICA to address the COVID-19 situation in the Philippines.

“Again, we express our heartfelt gratitude to the people and to the Government of Japan, represented here today by JICA Chief Representative Eigo Azukizawa and of course, His Excellency (Japanese) Ambassador (to the Philippines) Koji Haneda, for your support to the Filipino people during this very difficult situation,” Dominguez said.

“I am sure we shall soon prevail over this emergency. We will return to our growth path and recover our economic momentum. What will be unchanged is the deep friendship and cooperation between our two countries,” Dominguez said.

On the other hand, the Japan government said this will provide more jobs to Filipinos, helping boost the economy of the Philippines.

“We believe that this emergency support loan would complement our other projects in the Philippines to help boost the economy by providing jobs to many Filipinos, including the recent agreements for the Cebu Mactan 4th Bridge and Davao City Bypass Road infrastructure projects in support of the Build Build Build program and which we signed just about two weeks ago,” JICA Philippines chief representative Eigo Azukizawa said.

The loan package carries concessional lending terms of 0.01% fixed interest rate per annum with a maturity period of 15 years inclusive of a four-year grace period.

To be implemented from 2020 to 2021 by the Department of Health (DOH) and the National Economic and Development Authority (NEDA), the CCRESL will be utilized retroactively for the government’s COVID-19 response efforts undertaken since April 2020.

The loan will also help cover the budget expenditures already made or about to be made by the government.

The loan proceeds will automatically be available for withdrawal once the loan is declared effective, which is expected in the last week of July./Stacy Ang