Japan commits yen loan for Mindanao

Japanese Ambassador Koji Haneda turns over donated disaster reduction equipment to Public Works Secretary Mark Villar that include eight units of mobile drainage pumps and 17 units of floodlights and generator sets in simple ceremonies on Friday.

Japan on Friday committed $202 million, roughly P10.5 billion, as yen loan allowing the Philippines to pursue its Road Network Development Project (RNDP) in conflict affected areas in Mindanao.

This was bared by Japanese Ambassador Koji Haneda who said in a statement that an exchange of notes should soon be signed with Public Works and Highways Secretary Mark Villar.

“Based on this pledge, the Government of Japan and the Government of the Philippines are scheduled to sign an exchange of notes concerning the yen loan in the future,” Haneda said.

The committed loan set aside for the RNDP is on top of financial assistance Japan already provided under the Japan-Bangsamoro Initiatives for Reconstruction and Development or J-BIRD, thus far totaling 26 billion yen or some P13 billion since the program stated in 2006.

The J-BIRD program includes more than 824 community infrastructure, such as school and clinics, since 2006 as well as capacity building of over 400 people from Bangsamoro by inviting them to Japan in the last five years.

According to the Japanese Embassy, the newly-pledged RNDP aims to revitalize the local economy of Mindanao’s conflict-affected areas and reduce poverty.

It acknowledged the decades of conflict has slowed down Mindanao’s socioeconomic development but that the road project “seeks to foster economic activity, ensure smooth commodity flow, and improve the region’s accessibility.”

Pursued to the full extent, the RNDP “will contribute to improve logistics, stimulate economic activity and strengthen access to the region with the construction and refurbishment of roads and bridges in the conflict-affected areas of Mindanao.

“The implementation of this project is expected to contribute to peace and development in the area,” the Japanese embassy said.

The RNDP is structured as an 18-year obligation with a grace period of seven years and interest rate pegged to the six-month Libor plus 105 basis points.

The loan is also untied, meaning, the Philippines need not worry of Japanese contractors, engineers, suppliers and workers taking back the economic benefits provided by the accommodation.