PH receives ¥10-B post-disaster standby loan from Japan

Finance Secretary Carlos G. Dominguez announced Japan’s final disbursement under the second phase of the JPY 50 billion Post-Disaster Standby Loan (PDSL-2) package extended to the Philippines. PDSL-2 is a quick disbursement facility that allows Japanese funding support in multiple tranches for post-disaster response efforts in the event of a national calamity or health emergency.

Dominguez thanked the people and government of Japan for approving the fourth and final tranche amounting to JPY10-billion (equivalent to about P4.6 billion), which shall be used to support government efforts in providing emergency cash grants to vulnerable sectors in the National Capital Region (NCR). The disbursement was made in view of the recent declaration of an Enhanced Community Quarantine (ECQ) in the NCR in August to curb the spread of the highly transmissible COVID-19 Delta variant.

Under the agreement between the Japanese and Philippine governments for the PDSL-2, which was signed on September 15 last year, the disbursement of the standby loan will be made available through the declaration of a state of calamity or a state of public health emergency by the Duterte administration. In the case of the current COVID-19, the imposition of an ECQ or its equivalent in the NCR or in any other highly urbanized area in the country will trigger the disbursement of the loan.

Through the Japan International Cooperation Agency (JICA), four tranches in the aggregate loan amount of JPY 50 billion have been disbursed:

  • The first tranche amounting to JPY10 billion was disbursed on Oct. 27, 2020 in view of Presidential Proclamation No. 1021 declaring a State of Calamity throughout the Philippines until September 12, 2021.
  • JICA released the second tranche amounting to JPY10 billion on January 5, 2021 following Presidential Proclamation No. 1051 on November 18, 2020, declaring a State of Calamity in the entire Luzon Island Group.
  • JICA released the third tranche amounting to JPY20 billion on June 8, 2021 pursuant to four IATF resolutions, namely: (1) Resolution No. 106-A dated March 27, 2021 imposing a new ECQ in the NCR Plus Bubble, (2) Resolution No. 108-A dated April 4, 2021 extending ECQ in the NCR Plus Bubble, (3) Resolution No. 109-A dated April 10, 2021 imposing anew Modified ECQ in the NCR Plus Bubble; and (4) Resolution No. 113-A dated April 29, 2021 extending MECQ until May 14, 2021.
  • The fourth and final tranche amounting to JPY 10 Billion was made following IATF Resolution No. 130-A which placed NCR under ECQ from August 6 to 20, 2021.

Dominguez requested JICA Chief Representative Eigo Azukizawa for the release of the final tranche of the PDSL-2 loan to support the government’s implementation of its Social Amelioration Program (SAP) that aims to provide emergency subsidies to affected low-income households and displaced workers in the NCR, which was placed under ECQ as a preemptive measure against the latest COVID-19 wave.

The JPY10 billion disbursement will also help the government implement “other mechanisms necessary to properly implement COVID-19 response and recovery interventions in the country,” Dominguez said.

The PDSL 2 was extended by Japan in recognition of the Philippines’ plans and accomplishments in the following reform areas: 1) policy and institutional framework for disaster risk reduction and management; 2) financial resilience to natural disasters and climate change; and 3) public health emergency preparedness.