The national government has signed a P4.9 billion loan agreement with South Korea’s Eximbank that will finance the construction of Panguil Bay Bridge project in Northern Mindanao.
On behalf of the government, National Treasurer Roberto Tan signed the loan agreement with Chief Representative Yongkeun Oh of the Export-Import Bank of Korea-Economic Development Cooperation Fund (KEXIM-EDCF).
“Increased connectivity and mobility in Mindanao ought to spur more inclusive economic activity, ensuring we get an exponential amount of return for the investment the Governments of the Republics of Korea and the Philippines put in with this loan agreement,” Tan said.
The loan will finance the construction of a 4.19-kilometer bridge across Panguil Bay connecting the City of Tangub in Misamis Occidental and the Municipality of Tubod in Lanao del Norte.
It will reduce travel time between Tangub and Tubod from the usual 2.5 hours to 7 minutes.
The project will also significantly improve the travel time from Cagayan de Oro and Iligan to the cities of Tangub, Ozamiz, Oroquieta, Dipolog, and Dapitan in Zamboanga de Norte.
The Department of Public Works and Highways (DPWH) will serve as the implementing agency of the project, scheduled to be completed in 2018.
The signing puts into motion the first bridge infrastructure project of KEXIM-EDCF, accelerating growth in Mindanao with reliable and efficient transport infrastructure connecting the northern and western areas.
Of the total project cost, P4.2 billion will be funded through loan proceeds, while the remaining P586 million will be funded by the Philippine government.
The loan is highly concessional, carrying an interest rate of only 0.15 percent per annum for non-consulting services and 0.0 percent per annum for consulting services, for a total maturity of 40 years inclusive of a 10-year grace period.
The Department of Budget and Management announced that it has issued the project’s Forward Obligational Authority (FOA), which gives an overview of the annual investment cost of the Panguil Bay Bridge project, particularly for KEXIM-EDCF and the Philippine government.
“We appreciate the robust partnership we share with the Republic of Korea—this project is the latest evidence we have of friends from abroad placing their faith in our people,” Finance Secretary Cesar Purisima said during the signing. “The Panguil Bay Bridge Project not only connects two points in Mindanao; it connects us to an optimistic future for Mindanao’s growth and prosperity.”