Japan, Philippines Sign 50 Billion Yen Budget Support Loan
On July 1st, 2020, Ambassador HANEDA Koji signed and exchanged notes with Foreign Affairs Secretary Teodoro L. Locsin, Jr. to formalize the COVID-19 Crisis Response Emergency Support Loan.
This 50 billion yen loan (approximately 24 billion pesos) seeks to help curtail the spread of COVID-19 in the Philippines and shore up the government’s emergency response and economic stimulus by providing budgetary support. Under highly concessional terms, the loan’s repayment period is set to 11 years after a grace period of 4 years, with a fixed interest rate of 0.01% per annum. The loan will be co-financed with the Asian Development Bank (ADB) through its COVID-19 Active Response and Expenditure Support (CARES) Program.
The Philippine government is the very first recipient of this highly concessional loan, specifically designed by the Japanese government to address the global health crisis. Japan is the first bilateral donor to be able to offer a loan to the Philippines for its COVID-19 response program.
This loan is on top of the 2 billion yen in grant aid that Japan earlier announced to provide principal hospitals and institutions in the Philippines with the most advanced medical equipment, and also set up laboratory surveillance sites across the country.
As the Philippines battles the pandemic with the rest of the world, this assistance package from Japan is seen to augment health sector capacity, mitigate the impact of disruptions in economic activities, and pump-prime the Philippine economy to faster recovery.