JAPAN TO ASSIST PHILIPPINES IN LOGISTICS INFRASTRUCTURE UPGRADING

Logistics Insight Asia, 1/1/2010

The Japan International Cooperation Agency (JICA) has signed a US$329 million dollar loan agreement with the Development Bank of the Philippines (DBP) for the Logistics Infrastructure Development Project.

The JICA loan will be allocated to the financing of ship purchases and the construction of roads and logistics facilities, including cargo and storage. Part of the loan will be allocated to consulting services to improve the capacity of DBP to appraise sub-loans.

Although the Philippines has achieved an economic growth rate averaging close to five percent over the past fi ve years, the poverty level remains at 30 percent, and achieving sustained growth to create employment remains a critical issue.

To that end, logistics infrastructures must be expanded to promote private investment from inside and outside the country. Compared to other Asean nations, the Philippines still lacks adequate infrastructures such as ports and roads, and infrastructures for processing, storing and transporting crops and livestock products are insufficient. With agriculture being the Philippine’s key industry, the logistics infrastructure is a critical link for the quality of perishable goods and the costs of domestic distribution. The inadequacy of the infrastructure is causing the primary sector of the economy to flounder, according to a JICA press statement.

Taking these circumstances into consideration, the Philippine government is advancing the construction of an effective logistics network that combines marine transportation to connect the islands as well as intra-island roads.

With the aim of sustainable economic growth, JICA will provide a high level of assistance while integrating JICA’s three tools of assistance – technical cooperation, ODA loans and grant aid – to assist the Philippine government with improving its limited social and economic infrastructure.