PAMPANGA, Philippines – Before the Philippines becomes classified as an upper middle income country, Socioeconomic Planning Secretary Ernesto Pernia said the government will prioritize borrowing money from Japan for more expensive projects first.
On Tuesday, June 18, Pernia said that once the Philippines' income status is upgraded, the government will no longer be qualified for favorable terms of Japanese official development assistance.
"We would not be qualified for the Special Terms [for] Economic Partnership (STEP) funding. We would be non-STEP.... What we have to do is to prioritize the projects. More costly will be prioritized. We want them to move forward faster than the lesser cost projects," Pernia told reporters.
Philippine economic managers and their Japanese counterparts met on Tuesday for the 8th High Level Meeting of the Philippines-Japan Joint Committee on Infrastructure Development and Economic Cooperation in Clark, Pampanga.
According to Pernia, there is a grace period of two years from the time the Philippines achieves the upgrade.
He said that the planned Metro Manila Subway, North-South Commuter Railway, and Mindanao projects are among those that should be prioritized while there is time.
The Philippines is set to break into the rank of upper middle income status by the end of 2019, but Pernia said that the recent economic growth slump may hurt the forecast and delay it to 2020 instead.
The country's gross domestic product growth for the 1st quarter of 2019 plunged to a 4-year low of 5.6%, missing the government's target of 6% to 7%.
"We anticipated it could be end of this year, but it could be moved back to 2020 because of our lower economic growth rate this year possibly," Pernia said. – Rappler.com