$100-M South Korea loan to fund bridge across Panguil Bay signed

The loan agreement was signed by National Treasurer Roberto B. Tan for the Philippine government and Korea Eximbank Chief Representative Yongkeun Oh at the Bureau of the Treasury in Intramuros.

The Korea Eximbank manages the Economic Development Cooperation Fund (ECDF), an official development assistance program established in 1987.

"We appreciate the robust partnership we share with the Republic of Korea -- this project is the latest evidence we have of friends from abroad placing their faith on our people," Finance Secretary Cesar V. Purisima said in the statement.

The $100.13-million loan, according to the DoF, represents the first investment of ECDF in a bridge infrastructure. It will cover about 88% of the project's P4.86-billion total cost.

According to the Forward Obligational Authority issued by the Budget department, Korea Eximbank will finance the project with P161.94 billion in 2017, another P1.4 billion in 2018 and the remaining P2.71 billion in 2019. The Philippine government, meanwhile, will release P44.48 million of its P586.63-million counterpart this year to cover land acquisition, administrative support and payment of taxes.

The project will cost the government P23.89 million, P180.97 million and P337.34 million in the following three years. The investments will form part of the Department of Public Works and Highways' (DPWH) annual budget.

Constructing the Panguil Bay Bridge was first estimated to cost P5 billion, according to the DBM. The costs of direct construction, consultancy and physical contingency were later reduced.

"With the steadfast support we have from our development partners and neighbors, we are able to fund the Republic's infrastructure investments at a lower, and much favorable premium," Mr. Tan noted during the signing ceremony.

The loan carries an interest rate of 0.15% per annum for non-consulting services and 0.0% per annum for consulting services. It has a total maturity of 40 years, inclusive of a 10-year grace period.

The government targets to complete the Panguil Bay Bridge Project in 2018. The infrastructure will connect Tangub City in Misamis Occidental and Tubod City in Lanao del Norte.

The project is expected to cut the travel time between Tangub City and Tubod City to seven minutes from 2.5 hours. It will also shorten trips from Cagayan de Oro and Iligan to the cities of Tangub, Ozamiz, Oroquieta, Dipolog and Dapitan in Zambangoa del Norte.

"The Panguil Bay Bridge Project not only connects two points in Mindanao; it connects us to an optimistic future for Mindanao's growth and prosperity," Mr. Purisima said.

The increased connectivity and mobility in Mindanao, Mr. Tan said, should spur "more inclusive" economic activity and ensure "we get an exponential amount of return for the investment the Governments of the Republics of Korea and the Philippines put in with this loan agreement."

Source: B World Online