According to Presidential Spokesperson, Chinese loan, specifically the
gone through an Investment Coordinating Committee approval and the USD 62.09 million (about RMB 430.26 million) signed last year to help fund the construction of the Chico River Pump Irrigation Project has undergone due process.
“The aforesaid project has gone through an Investment Coordinating Committee approval and the loan agreement was reviewed, negotiated, and approved by the Interagency Committee composed of the Department of Justice, the Department of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP),” Panelo said.
“Also, the Monetary Board approved the terms of the loan for the Chico River Project before negotiation and after signing of the loan agreement,” he added.
He also said that the concessional interest rate, according to the DOF, if we account for all salient factors and not just the nominal rate (e.g., project cost, denomination of loan, and foreign exchange depreciation risk, among others), the effective interest rates between the recently signed Japanese and Chinese loan agreements are actually quite close to each other.
“With regard to the interest rate, on the other hand, our Chinese loans are fixed and not subject to change over time,” Panelo said.
He also note that by 2022, project debt to China is estimated to be at around 4.5% of the total debt, while that of Japan will be at around 9.5%.
Chico River Pump Irrigation Project will provide a stable supply of water to around 8,700 hectares of agricultural land, benefit 4,350 farmers and their families and serve 21 barangays in the provinces of Kalinga and Cagayan in Northern Luzon once completed.