Vol. XXII, No. 41 [ BusinessWorld Online ]
Monday, September 22, 2008 | MANILA, PHILIPPINES
THE BANGKO Sentral ng Pilipinas (BSP) has given its go-signal for the government to secure loans to fund its road and bridge construction in the rural areas.
In its meeting last week, the policymaking Monetary Board approved the government’s plan to borrow $257.4 million from French banking giant BNP Paribas.
The funds are intended for the proposed President’s Bridge Program-Mega Bridges for Rural and Urban Development Project.
The central bank estimates that about 85% of the total loan will be through a buyers’ credit facility and the remaining 15% will be composed of commercial loans.
The buyers’ credit facility, which is a loan granted to a borrower for importation of products, will have a maturity of 14 years and a grace period of four years. This will have a commercial interest reference rate (CIRR) of 2.49% per annum. CIRRs are the official lending rate of export credit agencies.
On the other hand, the funds to be borrowed through the commercial loan facility will have a maturity of five years with a 1.5-year grace period. Interest rate will be pegged on the six-month Japanese yen LIBOR plus a spread of 2.4%, which means that the rate will be reset every six months.
The President’s Bridge Program, which is spearheaded by the Department of Public Works and Highways, aims to link remote agricultural areas to the country’s major thoroughfares through the construction of bridges and farm-to-market roads.
The project involves the construction, installation and establishment of 10 girder-type flyovers and 72 national bridges along the country’s congested highways and road network.
The bridges were designed for quick installation using minimum equipment, and can be transported in regular trucks or standard sea containers.
The beneficiaries of the project will be those living in rural and urban areas of the country’s "super regions," namely: the North Luzon Agribusinesses Quadrangle, Luzon Urban Beltway, Central Philippines, and Mindanao. — G. S. dela Peña