Japan provides P24 billion post-COVID-19 loan to Philippines

MANILA, Philippines — Japan is providing 50 billion yen (approximately P24 billion) in loans to the Philippines to support the country’s quick recovery from natural and health-related disasters.

Foreign Affairs Secretary Teodoro Locsin Jr. and Japanese Ambassador Koji Haneda exchanged diplomatic notes yesterday at the Department of Foreign Affairs to formalize the Post Disaster Stand-by Loan Phase 2.

The PDSL 2 is the biggest among the PDSL loans Japan has provided to developing countries.

The loan is seen to help the Philippines better manage its vulnerability to natural disasters, combat the COVID-19 pandemic and mitigate the adverse effects of these risks on the country’s economy by promoting policy actions on disaster preparedness and providing a quick-disbursing budgetary support for the Philippines’ calamity response.

The Japanese embassy in Manila said the loan’s repayment period is set at 30 years after a grace period of 10 years, with a fixed interest rate of 0.01 per per annum.

“This 50B-yen fund is the most significant JP assistance to PH since the onset of COVID-19, along with the 50B yen loan in July,” the Japanese ambassador tweeted.

“Post-disaster standby credit, this is the second one with the same give-away terms: 0.01 percent, 30-year repayment, 10-year grace period. That’s more than friendship that’s plain pure partnership. Japan has our back,” Locsin also said on Twitter.

The loan is the latest support package extended by Japan to assist the Philippines in recovering from the impact of COVID-19.

This is the second time this special type of financing was extended to the Philippines. The first was made available only a few months following the onslaught of Super Typhoon Yolanda in 2013.

Early this year, Japan also contributed to the Philippine COVID-19 response program through an assistance package comprising 2-billion yen grant aid for the provision of medical equipment and establishment of laboratory surveillance sites, and another 50-billion yen budgetary support under the COVID-19 Crisis Response Emergency Support Loan.

“Japan will continue to be responsive to the needs of the Philippines in its bid to fight the COVID-19 crisis, beef up disaster risk management efforts and achieve a faster economic recovery,” the embassy said.