PH Secures P13-Billion Loan from Korea for Dumaguete Airport Development

The Philippine government has secured a P13.15-billion loan from South Korea for the development of a new Dumaguete City Airport in Negros Oriental. This funding agreement was formalized between the Department of Finance (DOF) and the state-owned Export-Import Bank of Korea (KEXIM).

Loan Agreement Details

Finance Secretary Ralph Recto and KEXIM CEO Yoon Hee-Sung signed the loan agreement at the Kapihan sa Manila Bay news forum. The total cost of the new Dumaguete Airport Development Project is P17.06 billion, with the Philippine government covering the remaining expenses.

The loan terms include an interest rate of 0.05% per year for non-consulting services and 0% for consulting services. The loan is to be repaid over 40 years, including a 10-year grace period.

“The new airport will enhance our capacity to welcome a surge of tourists in the post-pandemic era. With the new Dumaguete airport, we anticipate accommodating up to 2.5 million passengers per year, up from just 800,000. From serving limited domestic flights, we can now open the door to international routes,” Recto stated.

Project Scope and Benefits

The new airport, covering 197.55 hectares, will be built in the Municipality of Bacong, Negros Oriental. This development aims to address congestion at the current Dumaguete City Airport and to expand its capacity significantly.

In May, the Department of Transportation (DOTr) announced plans to relocate the Dumaguete City Airport along with other regional airports due to congestion issues. “The necessity for a bigger and more modern airport is undeniable, especially considering that Negros Oriental currently has only one major airport,” said Recto.

Additional Loan Facility

In addition to the Dumaguete airport loan, the DOF and KEXIM signed a $3-billion loan facility to support further infrastructure projects in the Philippines. This Economic Development Promotion Facility (EDPF) will finance projects such as the Panay-Guimaras-Negros Island Bridges, the Consolacion-Liloan Bypass Road Project, the Lapu-Lapu Coastal Road Project, and the Pampanga Integrated Disaster Risk Reduction and Climate Change Adaptation Project Phase II.

The EDPF loans carry an indicative interest rate of 1.2% and are repayable over 25 years, with a seven-year grace period.