Japan commits $1.3-B grant, soft loans to Phl

Japan has committed a total of $1.26 billion in grants and soft loans to the Philippines last year amid the stronger bilateral relations between the two countries, the Department of Finance reported yesterday.

According to Finance Secretary Carlos Dominguez III, bilateral relations between Manila and Tokyo, particularly in the field of economic cooperation, have strengthened amid increased efforts by the Duterte administration to rebalance its foreign policy towards Asia.

Dominguez has coined another term for President Duterte’s pivot toward Asia, describing it as a recalibration of the Philippines’ foreign policy which “opens up a lot of opportunities for us.”

“I would not say the foreign policy is changing, I think it’s just being recalibrated so that we are more open to other markets,” Dominguez said.

The finance department said aid, concessional financing, and investment pledges made by Japan after its Prime Minister Shinzo Abe met with President Duterte in 2016 have progressed into agreements, several of them to help fund the government’s Build Build Build program.

The foreign policy rebalancing has led to numerous opportunities for the Philippines not only in terms of concessional financing, grants and aid from Japan, but also in terms of business deals.

President Duterte’s trip to Japan last October led to the signing of 18 letters of intent by 20 Japanese companies to invest in the Philippines, which represent about $6 billion worth of new investments.

These include deals between Philippine and Japanese firms in the areas of manufacturing, shipbuilding, iron and steel, agribusiness, power, renewable energy, transportation, infrastructure, mineral processing, retailing, information and communication technology, and business process management.

After attending the 31st ASEAN Summit and its related meetings in Manila, Prime Minister Abe stayed behind for an official visit to personally witness the signing of several agreements with the Philippines, most notable of which was the Exchange of Notes for the $929.1 million loan to fund the first tranche of loan requirements for the construction of the Metro Manila Subway Project (Phase 1) of the Department of Transportation (DOTr).

Under Prime Minister Abe’s leadership, Japan has committed to provide about $8.8 billion in official development assistance (ODA) and investments to the Philippines during the term of President Duterte.

A Philippines-Japan HighLevel Committee on Infrastructure and Economic Cooperation was formed in March 2017 to discuss in detail the Philippine infra projects qualified for possible Japanese financing, the first time such a forum was created between the two countries.

Upon his return to the Philippines in November for the ASEAN Summit, Prime Minister Abe was ready to witness the signing between Tokyo and Manila of agreements worth about $1.18 billion.