BSP okays loan for LRT

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has approved the government’s foreign loan for Light Rail Transit (LRT) lines 1 and 2 extension projects.

BSP Governor Amando M. Tetangco Jr. told reporters late Friday the Monetary Board gave its final approval on a ¥43.252 billion or approximately $436.24-million loan from the Japan International Cooperation Agency.

“The project aims to enhance capacities of the LRT lines 1 and 2 by extending the lines from Baclaran to Bacoor, Cavite... and from Santolan to Masinag,” Tetangco said.

“The second aim is to mitigate traffic congestion and air pollution in Metro Manila with the procurement of new rolling stock and expansion and development of the LRT,” he continued.

The BSP chief is referring to the Department of Transportation and Communications’ (DOTC) plan to extend LRT 1’s reach from Pasay City to the province of Cavite, and LRT 2’s from Marikina to the province of Rizal.

However, the approved loan will only fund the government’s counterpart in the projects as the private sector will be invited to bid for the civil works contracts involved.

Tetangco noted that the Monetary Board earlier already approved the loan in principle but it was only last Thursday when the final approval was handed down.

Foreign currency-denominated loans need to be approved by and registered with the central bank as the BSP is mandated by law to keep the country’s obligations at manageable levels.

The debt has a maturity of 40 years, inclusive with a 10-year grace period. It has an annual interest rate of 0.2 percent, while a 0.01 percent interest rate per annum is applied to consulting services.