Philippines, South Korea sign $100-M loan deal to boost gov’t vaccination program

The Philippines and South Korea have signed a $100-million loan agreement to help boost the COVID-19 vaccination program.

The loan deal was signed on Friday by Finance Secretary Carlos Dominguez III, on behalf of the Philippines, and Country Chief Representative Jaejeong Moon, representing the Export-Import Bank of Korea-Economic Development Cooperation Fund (KEXIM-EDCF).

The agreement was for the second phase of the Program Loan for COVID-19 Emergency Response Program—Vaccination Program (PLCERP II).

“This financial assistance from Korea will go a long way in helping the Duterte administration rev up its mass vaccination program against COVID-19 that is crucial to the strong rebound by our domestic economy come 2022,” Dominguez said.

"Through this agreement, Korea is able to make further contribution to the Philippine government's tireless efforts to combat the pandemic and ultimately achieve early economic recovery,” South Korea's Ambassador to the Philippines Kim Inchul added.

According to the International Finance Group of the Department of Finance (DOF-IFG), PLCERP II will help “secure financial sustainability and fill the budgetary gap” in implementing the Department of Health’s (DOH) national COVID-19 vaccination program.

The DOF-IFG said the loan is designed to support the implementation, monitoring, and management of the ongoing vaccination drive.

In October last year, South Korea extended a $100-million loan to the government for the first phase of the PLCERP, which aimed to build systematic policy measures to respond to the Philippines’ public health challenges caused by COVID-19.

South Korea extended the loan for PLCERP II in recognition of the Philippines’ accomplishments and plans under the first phase of the loan program, which focused on seven policy actions, including: establishing a national policy or master plan in connection with COVID-19 vaccination; assigning roles of major committee and/or organizations to expedite the vaccine procurement and administration process; profiling eligible population and determining the priority groups; and securing  COVID-19 vaccines approved by the Food and Drug Administration (FDA).

These policy actions for which the Philippine government was also recognized likewise include establishing an effective mechanism for vaccine stock and logistics management; allocating budget for vaccine procurement; and setting up the guidelines to observe any adverse effects, and provide treatment and compensation for vaccines, the DOF-IFG said.

The loan is payable in 30 years, with a 10-year grace period and a fixed interest rate of 1.5%.

On top of providing funding support for the Philippines’ COVID-19 response, South Korea has also extended a $50-million loan to the Philippines-Korea Project Preparation Facility (PK-PPF) to bridge operational gaps in implementing projects under President Rodrigo Duterte’s signature infrastructure development program Build, Build, Build.

South Korea has also shared its expertise and assistance in setting up an electronic invoicing system in the Bureau of Internal Revenue (BIR) to improve tax administration.

The East Asian country has already committed Official Development Assistance (ODA) loans to the Philippines amounting to $1.25 billion as of 2020.

Through the KEXIM-EDCF, Korea intends to expand its assistance to the Philippines up to $3-billion in the next five years, according to the DOF.  — VBL, GMA News