Exchange of Notes concerning a loan to the Philippines
February 10, 2019
1. On February 10 (same day local time), Mr. Taro Kono, Minister for Foreign Affairs, who is visiting the Republic of the Philippines, and H.E. Mr. Teodoro L. Locsin, Jr., Secretary of Foreign Affairs of the Republic of the Philippines, signed and exchanged notes, in Davao City, concerning a provision of a loan to develop a road network that supports the foundation of people’s lives in the conflict affected areas in western part of Mindanao (loan provision of up to 202.04 million US dollars).
2. Overview of the project
The poverty rate of the conflict affected area in Mindanao is the highest in the Philippines due to limited infrastructure investments and other reasons. In particular, development of road network in the region is lagging behind other areas in the country.
Meanwhile, the Mindanao Peace Process is at a critical juncture leading to the establishment of the Bangsamoro Transition Authority. In January, plebiscite was conducted under the observation of international community, including the Japanese Mission headed by Parliamentary Vice-Minister for Foreign Affairs, Mr. Norikazu SUZUKI.
This project will contribute to developing a road network that supports the foundation of people’s lives in Mindanao; by improving access to public services such as schools and hospitals; and by revitalizing economic activities in the region. The Government of Japan will support the region in the course of the establishment of a new autonomous government in Mindanao scheduled in 2022, with making local people feel the benefit of peace and with contributing to realizing long-cherished peace.
This project is estimated to be utilized by local residents in 2026 (two years after the completion of the Project) as follows:
|Average daily traffic volume（vehicles／day）||:||about 9,000 vehicles／day|
|Users（person／year）||:||about 20,000,000 persons/year|
|Cargo Volume（ton／year）||:||about 1,550,000 ton/year|
（the Road Network Development Project in Conflict Affected Areas in Mindanao）
3. Loan terms of the loan
|Interest Rate||:||USD LIBOR (6 month) +105 bps|
|Repayment Period||:||25 years (inclusive of 7-year grace period)|