The Philippine Star, 7 October 2013
By Kathleen A. Martin
MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) has approved the governmentâ€™s foreign loan for Light Rail Transit (LRT) lines 1 and 2 extension projects.
BSP Governor Amando M. Tetangco Jr. told reporters late Friday the Monetary Board gave its final approval on a ÂĄ43.252 billion or approximately $436.24-million loan from the Japan International Cooperation Agency.
â€śThe project aims to enhance capacities of the LRT lines 1 and 2 by extending the lines from Baclaran to Bacoor, Cavite… and from Santolan to Masinag,â€ť Tetangco said.
â€śThe second aim is to mitigate traffic congestion and air pollution in Metro Manila with the procurement of new rolling stock and expansion and development of the LRT,â€ť he continued.
The BSP chief is referring to the Department of Transportation and Communicationsâ€™ (DOTC) plan to extend LRT 1â€™s reach from Pasay City to the province of Cavite, and LRT 2â€™s from Marikina to the province of Rizal.
However, the approved loan will only fund the governmentâ€™s counterpart in the projects as the private sector will be invited to bid for the civil works contracts involved.
Tetangco noted that the Monetary Board earlier already approved the loan in principle but it was only last Thursday when the final approval was handed down.
Foreign currency-denominated loans need to be approved by and registered with the central bank as the BSP is mandated by law to keep the countryâ€™s obligations at manageable levels.
The debt has a maturity of 40 years, inclusive with a 10-year grace period. It has an annual interest rate of 0.2 percent, while a 0.01 percent interest rate per annum is applied to consulting services.
GMA News, 6 October 2013
The Bangko Sentral ng Pilipinas announced over the weekend that the government has approved with finality a multimillion-dollar loan to fund the Light Rail Transit (LRT) 1 and 2 extension.
The Japan International Cooperation Agency will fund the extension of LRT Line 1, from Baclaran, ParaĂ±aque City to Bacoor, Cavite; and Line 2, from Santolan, Quezon City to Masinag, Antipolo City.
BSP Governor Amando Tetangco Jr. said that the approved loan was for ÂĄ43.252 billion or approximately $436.24 million.
â€śThis loan is supposed to fund the capacity enhancement of mass transit systems in Metro Manila. They call it the MTSP, or the Mass Transit System Project of the [Department of Transportation and Communication],â€ť Tetangco said.
â€śIt is a foreign loan designed to fund infrastructure projects. It had a previous approval in principle, but this is the final approval,â€ť he added.
The loan, which has a 40-year maturity period inclusive of a 10-year grace period, will have interest rates of 0.20 percent per annum for non-consulting services and 0.01 percent per annum for consulting services.
According to Tetangco, the low interest rates are thanks to the rock-bottom global interest rates as of late. For instance in Japan, he said interest rate there is now close to zero.
â€śThis low rate is now reflected in this loan. But this is highly concessionalâ€¦ it has low rates which of course is very favorable for us,â€ť he said.
The project is expected to mitigate traffic congestion and air pollution in the metropolis with the procurement of new rolling stocks and expansion of LRT Lines 1 and 2 depots.
Under the public-private partnership scheme, about half of the P60-billion project cost will be funded by the private sector. The government, on the other hand, will take care of the other half for the acquisition of 39 new light rail vehicles through the ODA loan from Jica.
The rail project will extend the 20-kilometer LRT-1 system, which runs from Roosevelt Avenue in Quezon City to Baclaran, by an additional 11.7 km to Bacoor.
Once completed, the project will increase the ridership of LRT-1 from half a million to about 700,000 commuters daily. It is also seen to provide faster and easier transportation for the residents of Cavite, ParaĂ±aque and Las PiĂ±as into the metropolis.
The government earlier said it was targeting construction works for the project to commence by early next year.Â â€” PDC/BM, GMA News
Manila Standard Today, 6 October 2013
By Julito G. Rada
The Monetary Board, the policy-making body of Bangko Sentral, has cleared the governmentâ€™s $436-million loan from Japan International Cooperation Agency that will fund the expansion of Light Rail Transit lines.
Bangko Sentral Governor Amando Tetangco Jr., who also serves as the chairman of the Monetary Board, said over the weekend the approved loan at low interest rates involved 43.252 billion yen or about $436.2 million.
â€śThis loan is supposed to fund the capacity enhancement of mass transit systems in Metro Manila. They call it the MTSP, or the Mass Transit System Project of the DOTC [Department of Transportation and Communications],â€ť Tetangco said.
Official development assistance loans require approval from the Bangko Sentral, which is authorized to control the size of the countryâ€™s obligations and keep the debt service burden at manageable levels.
The government and Jica signed the loan agreement as early as March 2013 to support the capacity enhancement of mass transit systems in Metro Manila, which involves the procurement of rolling stock and installation of facilities for the LRT Line 1 extension and the LRT Line 2 extension.
The government is preparing the bid documents for the LRT Line 1 extension to Bacoor, Cavite and Line 2 extension from Santolan, Quezon City to Masinag, Antipolo City.
Tetangco said the capacity expansion project was expected to mitigate traffic congestion and air pollution in the metropolis.
â€śSo it is a foreign loan [official development assistance] designed to fund infrastructure projects. It had a previous approval in principle but this is the final approval,â€ť Tetangco said.
He said the loan has a 40-year maturity inclusive of a 10-year grace period. It also has interest rates of 0.20 percent per annum for non-consulting services and 0.01 percent per annum for consulting services.
â€śThis low rate is now reflected in this loan. But this is highly concessionalâ€¦ It has low rates which of course is very favorable for us,â€ť Tetangco said.
The Transportation Department earlier said it would rebid the P60-billion LRT-1 extension project to Cavite after revising the terms of the auction.
The original Aug. 15 bidding of the project was declared a failure because the lone bidder, the consortium led by Metro Pacific Investments Corp., did not comply with the requirements.
Light Rail Manila Consortium, a joint venture between the Ayala Group and MPIC, was the only party that gave a qualified offer with certain conditions.Â Â AC Infrastructure Holdings Corp., a unit of Ayala Corp., pulled out of the project.
The three other pre-qualified consortiums of San Miguel Corp.â€™s SMC Infra Resources Inc., DMCI Holdings Inc., and MTD-Samsung Consortium of Malaysia and Korea also withdrew their bids.
The government said it was expecting construction works for the project to commence early next year.
Under the public-private partnership scheme, about half of the P60-billion project cost will come from the private sector. The government, on the other hand, will take care of the other half for the acquisition of 39 new light rail vehicles through the ODA loan from Jica.
The rail project will extend the 20-kilometer LRT-1 system, which runs from Roosevelt Avenue in Quezon City to Baclaran, by an additional 11.7 km to Bacoor.
Once completed, the project will increase the ridership of LRT-1 from half a million to about 700,000 commuters daily. It was also seen to provide faster and easier transportation for the residents of Cavite, Paranaque and Las Pinas.
Philippine Daily Inquirer, 6 October 2013
By Paolo G. Montecillo
Funding for separate projects to extend two of Metro Manilaâ€™s major overhead train lines has received regulatory approval from the central bank, helping pave the way for construction to finally start soon.
The Bangko Sentral ng Pilipinas (BSP) has approved a concessional loan from the Japan International Cooperation Agency (Jica) that would fund the extension of the Light Rail Transit (LRT) lines 1 and 2, which are two priority projects of the Aquino administration.
â€śThe rates we got were very concessional,â€ť BSP Governor Amando M. Tetangco Jr. said, explaining that the terms of the loan were extremely friendly for the borrower, the Philippine government.
The loan worth 43.252 billion yen or approximately $436.24 million, will partly fund the capacity expansion of the LRT line 1 through the purchase of new train cars. Buying the new cars that can accommodate more people is the governmentâ€™s part in the LRT line 1â€™s extension.
The loan is payable over 40 years, inclusive of a 10-year grace period, and carries an interest rate of 0.02 percent a year. â€śGlobal interest rates have really come down. This is highly concessional and favorable to the government,â€ť Tetangco said.
The construction of new tracks that will extend the train line from its current southernmost station of Baclaran to Bacoor, Cavite, will done by the private sector.
When the governmentâ€™s and the private sectorâ€™s contributions are combined, the LRT line 1 project will be worth roughly P60 billionâ€”making it the most expensive piece of infrastructure in the governmentâ€™s current pipeline.
The long-delayed project is also the most expensive public-private partnership (PPP) that the government wants to bid out.
Bidding to find the private sector contractor to take on the project failed earlier this year because only one firm, Manuel V. Pangilinanâ€™s Metro Pacific Investments Corp. (MPIC), submitted a technical and financial proposal.
BSPâ€™s Tetangco said part of the loan would also fund the extension of the LRT line 2 from its eastern station of Santolan, Marikina, to the Masinag Junction in Antipolo.
â€ś(These projects) will mitigate traffic congestion and pollution in Metro Manila,â€ť Tetangco said.
Business World, 6 October 2013
By Ann Rozainne R. Gregorio
â€śThe MB [last Thursday] gave its final approval for the loan … from JICA in the amount of ÂĄ43.252 billion or approximately $436.24 million for the Mass Transit System project of the DoTC (Department of Transportation and Communications),â€ť BSP Governor Amando M. Tetangco, Jr. told reporters Friday night.
The funds, which are an official development assistance loan from JICA, will be used to â€śenhance capacities of the LRT (Light Rail Transit) Lines 1 and 2 by extending the lines from Baclaran to Bacoor in Cavite and from Santolan to Masinag, respectively,â€ť Mr. Tetangco added.
â€śThe project also aims to mitigate congestion and air pollution with the procurement of new rolling stocks (train coaches).â€ť
The 40-year loan, which was approved in principle in May, will carry a 0.20% rate per year for non-consulting services, 0.01% annual interest for consulting services and a 0.10% per annum rate for the commitment fee. It will also have a grace period of 10 years.
The low interest rates of the infrastructure loan, Mr. Tetangco said, are â€śvery favorableâ€ť for the country. He added that these also reflect low interest rates in global markets.
The P9.76-billion LRT-2 Masinag extension project was approved by the National Economic and Development Authority Board in September last year.
According to the DoTC, the private sector shall be tapped to operate and maintain the existing 13.8-kilometer LRT-2 — which runs from Recto Station in Manila to Santolan Station in Pasig — and the 4-km extension to Masinag, Antipolo.
The civil works will be undertaken with government funds while the procurement of trains will be funded by official development assistance.
Meanwhile, the P60-billion LRT-1 south extension project involves the extension of the railway by 11.7 km to Cavite from the Baclaran endpoint. It also involves the operation and maintenance of the railway, design/construction/ integration of the Cavite extension, and a program for continued system enhancements.
The LRT-1 extension project will be placed on the auction block anew next year after bidding failed in August.
The LRT-1 extension project — the biggest public-private partnership offered by the Aquino administration to date is — one of three PPP deals the DoTC has been forced to defer, the others being the P1.72-billion automated fare collection system for Metro Manilaâ€™s light railways and the P17.5-billion Mactan-Cebu International Airport rehabilitation project, after prospective bidders raised issues with the concession agreements.
DoTC Secretary Joseph Emilio A. Abaya last month said that the re-bidding of the LRT-1 project is expected to take place within the â€śfirst quarter of next year.â€ť
So far, three PPP deals have been successfully auctioned off since this centerpiece program was launched in late 2010: the P1.96-billion Daang Hari-South Luzon Expressway Link, awarded to Ayala Corp. in December 2011; the P16.42-billion PPP School Infrastructure Project Phase One (PSIP-I), granted last year to the Citicore Holdings Investment, Inc.-Megawide Construction Corp., Inc. and BF Corp.-Riverbanks Development Corp. consortiums; and the P15.86-billion NAIA Expressway project, awarded to a unit of San Miguel Corp. in May.
The Philippine Star, 14 July 2013
By Prinz P. Magtulis
MANILA, Philippines – Local and foreign banks have upgraded their growth forecasts for the Philippines this year on expectations that robust consumer spending and investments would thwart the impact of still-weak trade demand.
In separate reports released Friday, HSBC and Metropolitan Bank and Trust Co. (Metrobank) both revised upwards their growth projections for the local economy to 6.4 percent and seven percent, respectively.
HSBC earlier forecast a 5.9-percent growth, while Metrobank predicted in a six-percent uptick. Gross domestic product (GDP) expanded 6.8 percent last year, while the first-quarter figure registered atÂ a better than-expected 7.8 percent.
The outlooks fall within the Aquino administrationâ€™s six- to seven-percent target for the year.
According to HSBC, â€śresilientâ€ť remittances from overseas Filipinos are expected to support domestic spending of consumers and investors. A stable rise in consumer prices could also contribute to purchasing power.
Based on HSBCâ€™s estimates, inflation is expected to fall to 2.9 percent this year, slower than last yearâ€™s 3.2 percent, and falling below the central bankâ€™s three- to five-percent target.
This, the bank said, will be due to â€śabundant food supply and low global commodity pricesâ€ť which translate to lower transportation costs. As of the first half, inflation averaged at 2.9 percent.
â€śIncreased government spending as well as loose monetary policy are expected to step in to counter weak global demand,â€ť HSBC pointed out.
â€śBenign inflationary pressures have given space for the central bank to keep main policy rates for now,â€ť it added.
The Bangko Sentral ng Pilipinas (BSP) would likely
keep policy rates at record-lows of 3.5 percent and 5.5 percent this year, helping supply cheap credit to support economic activity. The return on special deposit accounts (SDA) will also likely be kept at low rates.
â€śWith the volatility in asset markets, the BSP will adopt a wait-and-see mode in the mean time,â€ť HSBC said.
Meanwhile, Metrobank expects consumer spending and private construction to drive growth this year.
It said the private sector would likely contribute more to expansion going forward, especially on the real estate sector, one of the key drivers of first quarter growth. On the services sector, tourism would be a game changer.
â€śThe remarkable expansions in investment spending and the manufacturing sub-sector have been a major push to GDP growthâ€¦which when sustained would lay the foundation for a more sustainable and inclusive growth moving forward,â€ť Metrobank explained.
Date of Issuance: 09 January 2013
The Monetary Board decided to extend for another three (3) years the original three (3)-year period allowing a separate single Â borrower’s Â loan (SBL) limit of 25% of Â the net Â worth of the lending Â bank/quasi-bank for loans, credit Â accommodations Â and Â guarantees Â granted Â for Â undertaking infrastructure and/or development Â projects Â under Â the Public-Private Â Partnership Â (PPP) Â Program.
The extension of another three (3) years for the separate 25% SBL for PPP infrastructure and/or development projects is expected to encourage the financial sectorâ€™s participation in the PPP Program of the government, particularly with respect to the projects.
DownloadÂ BSP Circular No. 779 s 2013 here.