The Philippines and Japan have signed two loan accords with a combined amount of PHP75.5bn ($1.5bn) for two large infrastructure projects in the Visayas and Mindanao under the ‘Build, Build, Build’ program. The program launched over four years ago was expanded in October 2019 to include more number of infrastructure projects.
The Philippines government believes these project could aid the country tide over the economic impacts of COVID-19 sooner. Of the total, the additional loan will cover a part of the PHP57bn Cebu-Mactan Fourth Bridge and Coastal Road Construction projects in the Visayas. Around PHP18.5bn from this loan would supplement financing Davao City Bypass Construction Project.
The project aims to improve the capacity of the existing road network connecting mainland Cebu to Mactan Island and facilitate ease of movement.
Japan has loaned the amount at a concessional interest rate at 0.10pc has been levied annually for non-consulting services and 0.01pc for consulting services with a maturity period of 40 years inclusive of a 12-year grace period. Japan International Cooperation Agency (JICA) would provide funds for detailed engineering designs for the projects over the consolidated amount of loans.
Work on the Cebu-Mactan is to commence in 2021 and is likely to complete in 2029. While construction of the Davao City Bypass project is expected to begin in 2020 and likely to be operative by 2023.