20-B yen loan package to help PH in COVID-19 response efforts

Finance Secretary Carlos Dominguez III thanked the Japanese government for approving the disbursement of the JP¥20-billion (about PHP8.71 billion) under the second phase of the Post-Disaster Standby Loan (PDSL-2) package extended to the Philippines to assist it in its coronavirus disease 2019 (COVID-19) response efforts, especially in providing emergency assistance to vulnerable sectors.

Dominguez said the 20 billion Japanese yen will help meet the Philippine government’s huge financial requirements when it distributed emergency cash aid to families affected by the enhanced community quarantine (ECQ) and modified ECQ (MECQ) that were imposed in the National Capital Region (NCR) and nearby provinces on March 27 to May 14 of this year, following the surge in Covid-19 infections in these areas.

The JP¥20-billion disbursement, which the Philippine government received this month, represents the third tranche of the PDSL-2 loan extended by the Japan International Cooperation Agency (JICA) to the Philippines last September.

The first and second tranches amounting to 10 billion yen each were released last October 27, 2020 and January 5, 2021, respectively.

PDSL-2 aims to quickly disburse Japanese funding support for post-disaster response efforts in the event of a national calamity or health emergency.

Under this agreement, the disbursement of the standby loan to the Philippines will be made available through the declaration of a state of calamity; or declaration of a state of public health emergency.

In case of the current Covid-19 pandemic or any other public health emergency, the imposition of an ECQ or its equivalent in the National Capital Region (NCR) or in any other highly urbanized area in the country will trigger the disbursement of the loan.

Dominguez wrote JICA Philippines Chief Representative Eigo Azukizawa last May 11 to request for the disbursement of the JP¥20-billion fund.

The declarations of ECQ and MECQ in NCR and the provinces of Bulacan, Cavite, Laguna and Rizal, collectively known as the “NCR Plus Bubble”, served as the triggers for disbursements under PDSL-2, Dominguez said.

“We hope to utilize the amount to be disbursed under PDSL-2 to support a portion of the total requirement for the implementation of the SAP (social amelioration program) and other mechanisms necessary to properly implement COVID-19 response and recovery interventions in the country,” Dominguez said in his letter.

In announcing the JP¥20-billion disbursement, Azukizawa said “JICA will continue to support our partner countries like the Philippines in building back better from the COVID-19 crisis.”

“The disbursement hopefully will support the social amelioration program for vulnerable people and sectors, and thereby cushioning the economic impact of the pandemic in the Philippines particularly job losses and support economic recovery efforts,” he added.

The Philippines and Japan signed on September 15 last year the agreement for the JP¥50 -billion PDSL-2.

Equivalent to about PHP23.3 billion, the PDSL-2 will be available for quick disbursement in multiple tranches within three years once the loan is declared effective, and may be extended for an additional three-year period for up to four times.

The PDSL 2 was extended by Japan in recognition of the Philippines’ plans and accomplishments in reform areas: policy and institutional framework for disaster risk reduction and management; financial resilience to natural disasters and climate change; and public health emergency preparedness.