The Export-Import Bank of Korea announced on June 5 that the state-run bank inked a loan grant contract with the Department of Finance of the Philippines on June 4 to support the Cebu New Port Construction Project with US$173 million in the Economic Development Cooperation Fund (EDCF) funds.
The agreement was signed shortly after a summit meeting between Korean President Moon Jae-in and Philippine President Rodrigo Duterte in Seoul. It is the first loan grant agreement based on the US$1 billion Korea-Philippines EDCF agreement that will hold from 2017 to 2022. It is the first time that the EDCF is used to support a port construction project.
The Philippines is a nation comprised of about 7,000 islands. Due to its geographical nature, most of the nation’s logistics depends on maritime transportation. So, it is important to expand the nation’s port infrastructure in order to achieve sustainable economic growth. In particular, Cebu Port which handles 11% of the nation’s total cargo volume is in dire need for port expansion due to its poor infrastructure.
If US$173 million in EDCF funds is granted to the Philippines, the nation will improve its marine transportation conditions through the expansion of its port infrastructure. In the end, the funds will generate direct and indirect job creation effects thanks to the growth of the Philippine industrial and economic sectors.