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South Korea to extend $300m in development loan to Philippines
After a meeting with Yoon Tae Yong of South Korea’s Ministry of Strategy and Finance, Rolando Tungpalan, Neda deputy director general for Investment Programming, said the country may receive more official development assistance (ODA) through the Economic Development Cooperation Fund (EDCF).
The current EDCF Framework Agreement between Korea and the Philippines covers the period 2007-2009 amounting to $300 million. Among the recently signed projects for EDCF financing are the Bacolod-Silay Airport Access Road and the second phase of the Gapan-San Fernando-Olongapo Road.
“While no amount has been committed, the directional statement that the Philippines is the No. 1 priority of the Korean government is indeed most welcome,” Tungpalan said in a statement.
Pending the signing of the new framework agreement, both parties agreed to consider priority projects on their respective merits.
Such projects include the two phases of the Northrail-Southrail Linkage, Laguindingan Airport’s Air Navigation Facilities, the Philippine Maritime Safety, Security and Surveillance System, and Cebu Port Authority’s Management Information System.
Tungpalan also called for the early conclusion of the 2010-2013 EDCF Framework, which provides clarity and predictability of development assistance.
Aside from the EDCF, Korea also extends technical assistance to the Department of Agriculture’s (DA) Multi-Industry Clusters (MIC) program, which was strongly supported by Korean Ambassador to the Philippines Choi Joong-kyung.
The MIC program, which is funded by the Korea International Cooperation Agency, aims to promote food security, reduce rural poverty and enhance productivity and competitiveness in the agricultural sectors through agro-industrial development and establishment of critical infrastructure, among others.
The DA is currently conducting feasibility studies in the provinces of Isabela, Quirino and Aurora in Luzon, Bohol in the Visayas, and Misamis Oriental and Bukidnon in Mindanao for the MIC.
Tungpalan said the MIC is a promising programme, as it harnesses the Philippines’ competitive advantage in environment and agriculture by utilizing Korea’s advantage in technology and capital.
“While the major growth drivers are very urban-based, poverty is largely a rural phenomenon in the Philippines. The MIC ensures us of greater added value to basic primary production and allows us to be more integrated and cohesive in the way we plan our development,” the Neda official said.
The EDCF, which was established in 1987, is the Korean government’s special fund for extending bilateral concessional loans to developing countries.