No approvals yet under P50-B ERAP bonds

After almost one year, the government has not approved a single project under the P50-billion special fund known as ERAP (Economic Recovery through Agriculture Production) bonds.

The National Development Co. (NDC) said there are 86 projects pending for government financing for agriculture, industry and services. These projects have an estimated total cost of P56.6 billion.

NDC general manager Sammie Lim said these projects applied for government co-financing with the agriculture sector accounting for 66 projects worth P35 billion. Also pending for approval were nine industrial projects worth P13 billion and 11 projects in the service sector worth P8 billion.

According to Lim, the NDC will require at least P18.7 billion for government to finance its portion of the total project cost.

Since the ERAP bonds are exclusively for agricultural projects, Lim said the fund would co-finance only about P10.6 billion of the P35 billion needed for the 66 agricultural projects.

However, he said only three of the agricultural projects have bee approved by the NDC technical group. These will still have to be approved by the NDC board before qualifying for ERAP funding.

Meantime, government has been paying interest on the bonds for almost a year now since it was launched in April 1999. Lim said the proceeds of the bonds are currently invested in Treasury bills.

The proceeds from the ERAP bonds were originally intended for big-ticket agricultural projects supposedly to have the highest impact on the sector. However, government has since lowered the hurdle down to at least P60 million for individual projects and big ticket projects costing over P1 billion are being trimmed.

"We don't want any single company to ask for so much and corner the funds available," Lim said.