THE Department of Finance (DoF) said the government allocated the proceeds from Japan’s JPY20-billion loan — equivalent to around P8.71 billion — for emergency subsidies in April for people affected by the pandemic, as well as other spending items related to the public health crisis.
The enhanced community quarantine (ECQ) enforced in April served as the trigger for the Japan International Cooperation Agency (JICA) to release the third tranche of its standby loan to the Philippines, Finance Undersecretary Mark Dennis Y.C. Joven said Wednesday.
The loan helped fund the P23-billion emergency subsidy program that month, and also supported other items.
The government issued emergency cash aid worth P1,000 per person or up to P4,000 per household to poor families in Metro Manila and nearby provinces to help them deal with the two-week ECQ.
“We hope to utilize the amount to be disbursed under PDSL-2 (Post-Disaster Standby Loan 2) to support a portion of the total requirement for the implementation of the SAP (Social Amelioration Program) and other mechanisms necessary to properly implement COVID-19 (coronavirus disease 2019) response and recovery interventions in the country,” Finance Secretary Carlos G. Dominguez III said in his request to JICA Philippines Chief Representative Eigo Azukizawa on May 11.
Japan released JPY20 billion earlier this month as the third tranche of its JPY50-billion standby loan. This followed the JPY10 billion released in January and JPY10 billion in October.
An ECQ declaration was deemed a trigger event to disburse further tranches. Other conditions include the declaration of a state of calamity or of a state of public health emergency, natural disasters such as typhoons.
The credit line must be tapped within three years, subject to four extensions of the loan’s validity of three years each.
The loan charges a fixed interest rate of 0.01% and matures in 40 years, inclusive of a 10-year grace period.
In July 2020, the Philippines obtained a separate JPY50-billlion loan from JICA for its pandemic response.
Japan was the country’s top source of official development assistance with outstanding grants and loans equivalent to $8.537 billion at the end of March 2020, or 42.66% of the Philippines’ foreign aid. — Beatrice M. Laforga