The Government Financial Institution (GFI), Development Bank of the Philippines (DBP) has allocated a £ 50 billion fund to support the “effective implementation” of the Ten Year Maritime Industry Development Plan (MIDP) developed by the Authority for the maritime (marine) industry.
DBP and Marina formalized their partnership in the implementation of some of the programs under the MIDP with the signing of the Memorandum of Agreement (MOA) during the opening day of the 7th Philmarine 2022 held at the SMX Convention Center on June 21, 2022 .
Under the MOA, signed by DBP President and CEO Emmanuel G. Herbosa and Marina Nannette Dinopol’s Deputy Operations Administrator, GFI will provide an “attractive funding program, training and advisory services that will ultimately promote a progressive and sustainable maritime industry. “
Dinopol recalled that, even during the height of the pandemic, Marina continued to face “obstacles such as an aging fleet and a lack of attractive incentives and funding schemes for industry stakeholders”.
He said, “The Navy forged this MOA to partner with DBP to develop and implement comprehensive funding programs to assist shipyards, shipping companies and maritime investment cooperatives, as well as to provide necessary financing and credit facilities. , including other bank products and services in line with the strategic programs of the MIDP. “
In particular, Dinopol belongs to Program no. 1 which deals with the modernization of the national fleet; program no. 2 which focuses on the development of navigation services for maritime tourism; and program no. 5 which concerns the development of the maritime hub which includes shipbuilding and ship repair activities and logistics.
Herbosa, meanwhile, recalled DBP’s many years of experience in lending to local shipyards, port developers and shipowners in the acquisition of roll-on roll-off passenger ships for use in inter-island trade, particularly for routes. missionaries.
Therefore, the government-owned bank is already quite familiar with some of the MIDP’s programs.
In an interview following the signing of the MOA, Herbosa revealed that the GFI had allocated around £ 50 billion in loans to alleviate the financial challenges facing local players in shipbuilding and ship repair, logistics and shipowners who want to upgrade their fleet in internal trade.
The loans, he said, would be offered at very low interest rates. While current commercial rates hover around 8% and above, the annual interest rate under the shipping industry loan is pegged at just 5.5% for the first few years of the loan.
“That’s five and a half percent, you can’t go below that kasi mataas na ang ngayon rate,” said Herbosa, who has extensive banking experience for four decades.
Furthermore, he added, these loans are offered on preferential terms with a significantly longer payment period. Instead of the usual seven years, DBP can extend these payable loans over 15 years.
Loans may include expenses for pre-feasibility studies, detailed engineering design, consulting services, civil works, acquisition of equipment and machinery, and initial working capital, among others.
Herbosa, without naming names, revealed that DBP had experience extending a £ 7 billion loan to a single borrower in the maritime sector.