Finance chief assures PH can pay ₱52-B loan offered by South Korea

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Metro Manila (CNN Philippines, June 5) — The Philippines can pay back the $1 billion (around ₱52.78 billion) loan offered by South Korea, Finance Secretary Sonny Dominguez said Tuesday in a bid to allay concerns of increasing national debt.

"It is very, very generous of the Korean government and certainly we can afford this," Dominguez said in a press briefing in South Korea for President Rodrigo Duterte's official visit there.

The amount will be given to the Philippines as an Official Development Assistance (ODA), which refers to a government aid, a loan or grant that aims to promote the economic development of developing countries.

South Korea's loan will add up to the Philippines' ongoing ODA loans amounting to $11.9 billion (around ₱626.38 billion) as of December 2017.

But Dominguez assured the public the Philippines can pay the multi-billion peso loan for 40 years at a "cheap" 0.15-percent interest rate set by South Korea.

This will be available for Philippine use until 2022 and is double the amount the South Korean government loaned to the Philippines from 2011 to 2013.

Some $172 million (₱9 billion) will go to the new Cebu International Container Port project, which is envisioned to facilitate a faster flow of goods and services and lessen traffic in the province, Dominguez said.

Other projects that have been identified include a $50-million loan to the National Irrigation Administration, $100 million for an airport project in Dumaguete, and $41 million for the implementation of an electronic receipt, invoice and sales reporting system that will help the government monitor retailers' taxes. 

Dominguez aims to use the remaining amount, over $600 million, for other infrastructure projects under the Duterte administration's Build, Build, Build program.

He said he assured the South Korean government not a single peso of the ODA will be used for corruption.

Duterte and his officials' visit to South Korea is expected to reap ₱4.9 billion in business agreements and provide 50,000 jobs to Filipinos.

*Current exchange rate: $1=₱52.5780