With the construction phase of the Laguindingan Airport having been recently completed, funding for the purchase of navigational equipment is now secure with the approval by the Bangko Sentral ng Pilipinas (BSP) of a $13.4-million loan from the South Korean Export-Import Bank.

BSP Governor Amando M. Tetangco Jr. announced the approval over the weekend after the Monetary Board gave the green light for the project that would make the Misamis Oriental airport the newest major trunk line airport for Northern Mindanao.

Tetangco noted the “increasing air traffic” between the main island of Luzon and of Mindanao and the sore “lack of globally competitive facilities” meeting this demand.

The Philippine government, with  assistance from the government of South Korea, have jointly pursued the project since the 1990s when the initial plans were drafted first, he said.

As in the previous loan facility that built the airport, the navigation equipment purchase phase of the project was also designed on clearly concessional terms. The loan will mature in 40 years and should cost Filipino taxpayers no more than 0.15-percent interest every year.

Tetangco also said the loan augmented the earlier 31.2-billion won loan facility South Korea released in 1998 in the wake of the Asian financial crisis under Korean government’s Economic Development Cooperation Fund or EDCF.

The EDCF provided $30.60 million in loans while the South Korean Eximbank provided another $62.75 million at that time, Tetangco said.

Under the law, all foreign loans drawn overseas require prior Monetary Board approval as the seven-man policymaking body is tasked with ensuring against the likelihood of the IOUs maturing all at once in the future. Such so-called bunching of maturities strain the country’s ability to service the loans as there is only so much foreign currency available in the financial system at any one time.