Over $200M Japan loan signed for Mindanao road projects

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Davao bypass road

THE Philippines signed a $202.04 million loan agreement with Japan to fund the Road Network Development Project in Conflict-Affected Areas in Mindanao late Tuesday.

“This involves the construction, rehabilitation and improvement of 176.6-kilometers of road, linking of the Bangsamoro Autonomous Region in Muslim Mindanao to the trade centers of Mindanao,” Finance Secretary Carlos G. Dominguez III said in a briefing to announce the signing at the Clark economic zone.

The project involves the construction of access roads including the 19.8-kilometer Marawi Ring Road and the 23-kilometer the Marawi Trans-Central Road.

The agreement was signed by Mr. Dominguez and Japan International Cooperation Agency (JICA) Senior Vice President Yasushi Tanaka.

Mark A. Villar, Secretary of the Department of Public Works and Highways (DPWH), meanwhile said that with the signing of the loan signing, Marawi’s rehabilitation can proceed to full speed in July.

“The $200 million loan for the Marawi master plan is already signed and we are well on our way to implement the master plan that the President conceived after the Marawi incident. That is in addition to the grant given to us by Japan currently.”

“Of course there are challenges on the ground like the possible presence of IEDs (improvised explosive devices), but that being said a full-blown feasibility study masterplan as signed now is being funded… Implementation will be on full blast by July,” Mr. Villar said.

Mr. Dominguez said Japan is the largest donor of the Philippines for Marawi projects, and it is willing to provide more if necessary.

“The Japanese government is the largest donor or source of funds for the Marawi rehabilitation, and they mentioned today that if there is more needed they are willing to provide the funds,” Mr. Dominguez said.

Socioeconomic Planning Secretary Ernesto M. Pernia said that Mindanao has been neglected for long, and infrastructure projects are viewed as a key to uplifting the region’s economy.

“The data on gross regional domestic product (GRDP) simply shows that Mindanao has been neglected, and we hope that with all these projects being implemented will raise the GRDP of the Mindanao region,” Mr. Pernia said.

“The idea of having these infrastructure projects in the regions is to diminish the inequality across the regions to make the regions more connected to each other. To make the lagging regions connected with the mainstream economies,” he added.

Meanwhile, Mr. Dominguez said that the Japanese and Philippine officials will work on signing this year loan agreements for the ongoing Davao City Bypass Construction Project; New Mactan Bridge Construction Project in Cebu; the second phase of the Metro Manila Priority Bridges Seismic Improvement Project; and the second tranche of the loan for the first phase of the Metro Manila Subway Project.

Feasibility studies on the Dalton Pass East Alignment Alternative Road Project, subject to certain requirements, and the Circumferential Road 3 Project Missing Link Project will be done later this year, according to Mr. Dominguez.

Mr. Pernia said the government’s goal of graduating to upper middle-income status expected for this year might need to be moved to next year due to the low economic growth posted in the beginning of 2019.

“We anticipated around the end of this year, (but it could) move back to 2020 because of our lower economic growth rate this year possibly. Once… we achieve upper middle-income country status then we will not be qualified for (Japan’s) Special Terms on Economic Partnership (STEP) funding, so we will be on a non-STEP funding.”

As such, the government must prioritize projects while it still qualifies for STEP, he added. — Reicelene Joy N. Ignacio