Business

Here’s how much China is charging for PH loan for Luzon irrigation project

It’s pricier than Japan but cheaper than bank credit.

It’s pricier than Japan but cheaper than bank credit.

The Philippines has formally secured a loan from China to the tune of $62 million, which will support the construction of the Chico River Pump Irrigation Project in that will benefit farmers and lands in Cagayan and Kalinga.

Finance Secretary Carlos Dominguez III signed the loan agreement with Chinese Ambassador to the Philippines Zhao Jinhua during the Boao Forum for Asia held in China.

In return, China will collect interest at 2 percent per annum payable in 20 years, plus a seven-year grace period. This compares to a 0.10 percent annual interest rate for non-consulting services and 0.01 percent per annum for consulting services levied by Japan for the P935-million loan for the Metro Manila subway line signed last March.

The Chinese loan accounts for 85 percent of the total contract amount worth $73.04 million.

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