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Korean ODA doubles to $1 billion

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Carlos G. Dominguez III
PHILSTAR

By Arjay L. Balinbin
Reporter

THE SOUTH KOREAN government has doubled to $1 billion its official development assistance (ODA) to the Philippines for government projects, including the construction of new Cebu International Container Port, Dumaguete Airport, and project preparation facility of the National Irrigation Administration (NIA), the Department of Finance (DoF) said on Tuesday, June 5.

“I am pleased to report to you the extremely productive meeting I had with Deputy Prime Minister and Minister of Strategy and Finance Kim Dong-Yeon yesterday. I thanked Deputy Prime Minister Kim for the framework agreement between our two countries that was signed last month. This agreement results in the doubling of the Korean official development assistance committed to the Philippines, from $500 million from 2011 to 2013, to $1 billion available from 2017 to 2022. We intend to maximize this amount committed to us,” Finance Secretary Carlos G. Dominguez III said in a press conference at the Imperial Palace Boutique Hotel in Seoul, South Korea on Tuesday morning.

“The first loan carved out from the billion-dollar framework agreement amounts to $172.64 million. It will be used to finance the new Cebu International Container Port project,” said Mr. Dominguez, who signed the agreement on behalf of the Philippine government together with Sung-Soo Eun, chairman and president of the Export Import Bank of Korea (KEXIM).

In his meeting with his South Korean counterpart on Monday, Mr. Dominguez said they discussed “three projects in the immediate pipeline under the arrangement.”

“These include a $50-million project preparation facility for the National Irrigation Administration; a $100-million financing for the new Dumaguete Airport Development Project; and a $41-million project for the implementation of electronic receipt, invoices and sales reporting system that will help us monitor all the taxes paid by the retailers in the Philippines,” the Finance chief said.

As for the remaining ODA, Mr. Dominguez said: “I recommended to [South Korean] Deputy Prime Minister Kim the use of the unallocated amount to two or three of the flagship infrastructure projects…in the ‘Build, Build, Build’ program. We promised to forward to the Korean government as soon as possible a list of the flagship projects for their consideration.”

Mr. Dominguez assured Mr. Kim the Philippine government’s strict monitoring of the said projects “to make sure that none of the Korean taxpayers’ money is wasted in corruption and that all the ODA-supported projects will bring lasting benefits to the Filipino people.”

The Philippines also thanked the government of South Korea “for the $6.6-million grant for the enhancement of the capabilities of the Philippine National Police (PNP), which includes supply of vehicles and training of PNP personnel.”

“I have also found the opportunity to bring up our standing request for assistance in the protection and preservation of the ecological systems in high density tourist areas like Siargao so that they do not develop into problems like Boracay,” he further said.

On Tuesday afternoon, President Rodrigo R. Duterte attended the Philippines-Korea Business Forum at the Lotte Hotel in Seoul to witness the signing of at least 23 business agreements between Filipino and South Korean companies.

“There will be a signing of business agreements. This would be the business-to-business, 23-business agreements with an estimated total value of $4.8 billion,” Trade Secretary Ramon M. Lopez said in a press conference, adding these agreements are expected to generate “50,000 new jobs” for Filipinos.

The coverage of these agreements, according to Mr. Lopez, basically “reflects the interest from Korea, especially including its assistance for small and medium-sized enterprises (SMEs).”

“We have big companies involved for the signing. But we also cater to the SMEs. For example there is a letter of intent (LoI) on Chungcheong-do Kimchi which plans to expand its kimchi production, business operations in the Philippines. It has an inclusive business component as it is planning to engage local farmers from Benguet in its business operation,” Mr. Lopez said.

The trade chief said he also met with Pohang Iron and Steel Company (POSCO). “They are involved in amenities on infrastructure steel,” Mr. Lopez said. “They are looking into possible iron steel operation. [They want to] increase their engineering and constructions operation in the Philippines to support the ‘Build, Build, Build’ program of our President. They intend to expand their operation amounting to $200 million, which is expected to generate more or less 2,000 jobs.”

POSCO is set to construct a new power plant with a contract value of around “$900 million, with a total capacity of 600 megawatts in Masinloc, Zambales,” Mr. Lopez said.

He added: “We have also spoken to the SK Engineering & Construction Co. Ltd. (SK E&C). They intend to expand the development of (a) power generation project in Quezon. They are planning also to do an LNG (liquefied natural gas) and power infrastructure development and operation, LNG trading and city gas distribution intending to expand its business activity in the Philippines.”

Mr. Lopez said further Hyundai is now considering “seriously doing a production facility specifically both on passenger vehicles as well as commercial vehicles. On passenger vehicles, the midterm and long-term investment plan is to construct a plant for the purpose of assembling vehicles in the Philippines.”

“On the commercial vehicles, they intend to provide local manufacturing solution to the current public utility vehicle (PUV) modernization program,” he added.