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Philippines can tap $3 billion South Korea ODA for infrastructure until 2026

Louise Maureen Simeon - The Philippine Star
Philippines can tap $3 billion South Korea ODA for infrastructure until 2026
The arrangement will allow the Philippines to access South Korea’s Economic Development Cooperation Fund (EDCF) for the Marcos administration’s infrastructure development program.
The STAR / Michael Varcas, file

MANILA, Philippines — The Philippines can borrow up to $3 billion from South Korea to finance local infrastructure projects in the next four years.

Department of Finance Secretary Benjamin and South Korean Deputy Prime Minister Kyungho Choo formally exchanged the final draft of a framework arrangement on the sidelines of the annual meeting of the Asian Development Bank.

The arrangement will allow the Philippines to access South Korea’s Economic Development Cooperation Fund (EDCF) for the Marcos administration’s infrastructure development program.

The renewal of the arrangement will enable the Philippine government to tap as much as $3 billion in official development assistance (ODA) from EDCF starting this year until 2026.

This will be funded by the Ministry of Economy and Finance of the South Korean government.

The proposed fresh fund is on top of the $1 billion that the South Korean government earlier committed under an ongoing framework arrangement from 2017 to 2022.

Diokno said the ODA would be used to finance the government’s infrastructure development plan as it committed to allocate five to six percent of gross domestic product for infrastructure over the next six years.

South Korea is one of the largest providers of ODA to the Philippines, with loan and grant commitments amounting to around $850.88 million.

The EDCF was established in 1987 to promote economic cooperation between South Korea and developing countries such as the Philippines.

The EDCF assists partner countries by providing funding for their industrial development and economic stability.

The fund is focused on capacity building of partner countries, with the goal to help them achieve self-reliance. The main areas of assistance are human resources and economic infrastructure.

As a development project loan, the EDCF provides funds for infrastructure projects such as the construction of roads, railways, hospitals, vocational training centers, and water supply and sanitation systems under the economic development plan of a partner country.

DIOKNO

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