PHILIPPINES AND GERMANY SIGN THE 2005 FINANCIAL COOPERATION AGREEMENT

14 July 2006 – The Department of Foreign Affairs announces that the Governments of the Republic of the Philippines and the Federal Republic of Germany signed on 14 July 2006 the 2005 Financial Agreement that aims to further strengthen the relations of two countries.

The Financial Agreement was jointly signed by Foreign Affairs Assistant Secretary for European Affairs Maria Zeneida Angara-Collinson, for and on behalf of the Philippine government, and His Excellency Axel Weishaupt, German Ambassador to the Philippines, for and on behalf of the German government, during simple ceremonies at the Bulwagang Blas F. Ople, DFA. 

Under the Agreement, Germany will make available new funds that directly support the Philippines development objectives. In particular, a total of €8 million (approximately PhP512M) will be available to finance two development cooperation programs. These are the Community-based Forest Management in Visayas and the third Phase of the Study and Expert Fund.

Assistant Secretary Collinson explained that the Community-based Forest Management in Visayas, which will be based on the concepts of community forest resources that was introduced in the Quirino forestry program, aims to assist the Philippine government in its efforts to:

• Reduce poverty reduction;
• Protect forests and watershed in the region; and
• Assist the local rural population whose livelihood depends on forest resources.

On the other hand, the third phase of the study and expert fund will facilitate the following:

• Preparation and implementation of projects under the FCA;
• Assignment of experts for the projects;
• Preparation of feasibility studies.

Assistant Secretary Collinson added that the Agreement allocates the re-programmed funds in the total amount of €22.27 million to cover the following projects: Credit Line for Micro and Small Enterprises, Local-Government Unit Investment Program, Credit Line for Micro, Small and Medium Enterprises and Local Government Units, the 'Philippine Health Sector Reform Program and the Renewable Energy Program.

The Assistant Secretary explained that:

• The Credit Lines for Micro, Small and Medium Enterprises involves the provision of sub-loans to finance SMEs’ importation of capital and intermediate goods and spare parts in the retail scheme.
• The LGU Investment Program aims to support LGU initiatives in prioritizing and implementing their projects that help promote local economic and regional development through, among other things, access to market and job creation.
• The Health Sector Reform program aims to improve the health infrastructure and medical services in Eastern Visayas through the procurement of medical and non-medical equipment for health facilities. In addition, it aims to rationalize the number of health facilities in order to create viable and sustainable structures.
• The Renewable Energy Program will help the Philippine government achieve its goals to strengthen indigenous power resources and environmental protection, and extend power supply to non-electrified villages by implementing selected feasible projects in wind and hydro power energy.

Representatives from the National Economic and Development Authority, the Department of Finance, Department of Environment and Natural Resources, Small Business Guarantee and Finance Corporation, Land Bank of the Philippines, and the Kreditanstalt fur Wiederaufbau (KfW) witnessed the signing ceremony.  (Please refer to the accompanying photo release on this subject matter.)

Assistant Secretary Collinson said that since 1961, the German government has been a Philippine partner in development, with Official Development Assistance (ODA) extended in the form of loans under the Financial Cooperation Program (FC) and grants under the Technical Cooperation Program (TC). All projects approved under the Development Cooperation Program put high priority on poverty alleviation, good governance, and increasing public-private partnership in development, she added. END

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