Dof Grant Agreements

Meanwhile, Reuters reported that Economic Planning Minister Ernesto M. Pernia believed the suspension would not affect infrastructure projects, but confirmed that “some aid to ODA" (official development aid) could be affected. Dominguez said the palace order signed by Executive Secretary Salvador Medialdea had simply instructed the agencies concerned to “suspend negotiations on all credit and grant agreements with the governments of the countries that have supported and/or accepted the aforementioned resolution until our relations with these countries are assessed." DOF and DOF Subsea have entered into status quo agreements with their secured lenders, representing 93% of the total debt of the DOF group. The agreements suspend principal and interest payments to lenders until June 30, with the exception of payments made for DOF`s NOK100 million ($9.8m) credit facility, recently sealed in March. Finance Minister Carlos G. Dominguez III said over the weekend that the suspension of credit and finance negotiations would have “no significant impact on the country" as the majority of subsidies take the form of technical assistance, and proposed that the government`s infrastructure program remain the main driver of the economy. DOF says it will unilaterally enforce status quo agreements, including for lenders who have not reached an agreement with the company. It has not yet received any evidence that these lenders will claim loss provisions. The Office of the President issued a memorandum in which it ordered the suspension of all discussions on the grant agreements of the 18 countries supporting an investigation by the UN Commission on Human Rights into the war on drugs in the Philippines. “All relevant officials must suspend negotiations and the signing of loans and grant agreements with the governments of countries that have supported and/or voted in favour," the document states. Current grants to the affected countries amount to $197.03 million, of which $172.4 million is with Australia; $4.8 million, Italy; $1.11 million, Spain; USD 9.74 million, France; and $8.98 million, Germany. “The agreements are being concluded to facilitate dialogue with secured lenders and bondholders as part of the group`s bond loans on a long-term financial restructuring of the group," SAID DOF.

Dominguez said the proposed funding with the countries concerned, with the exception of a small loan of 21 million euros for the Manila Bus Rapid Transit (BRT) metro, would cover technical assistance grants “and therefore would not significantly affect the government`s infrastructure programme." “All the commitments proposed with the countries mentioned… are technical assistance grants and will therefore not significantly affect the government`s infrastructure program," Dominguez said in a telephone message to journalists over the weekend.