Japan Postpones $183 Million in Loans

Japan, the largest single donor nation to the Philippines, has postponed making $183.3 million worth of project loans to the government of President Ferdinand E. Marcos, Foreign Ministry officials said Thursday.

The shelving of funds for about a dozen projects coincides with strong criticism by Foreign Minister Shintaro Abe of what he termed the “unconvincing” reelection of Marcos on Feb. 7.

Foreign Ministry officials, however, did not equate the loan postponement with disapproval of the Philippine election. They said that unlike the United States, Japan cannot afford to be seen as interfering in the internal affairs of the Philippines.

“There is an unhappy history between Japan and the Philippines during the last war, the memory of which is not dead at all,” one official said. Japanese troops overran the Philippines in early 1942 and governed the islands harshly until driven out three years later by U.S. forces.

“We consider it most inappropriate to impose our ideas one-sidedly on the Filipinos,” the official added.

While Abe told members of Parliament’s Foreign Relations Committee on Wednesday that the results of the Philippine presidential election were “unpersuasive,” a Foreign Ministry official told reporters the next day that the Japanese government has not been able to confirm independently any incidents of violence and fraud.

The official said that Japan has urged the Philippine government to “economize government expenditures” in order to stabilize the economy. Last month, Japan agreed to reschedule $540 million in Philippine debts, part of $26.5 billion owed by the Philippines to foreign institutions.

Philippine officials in Tokyo were unavailable for comment on the loan postponement.

Could Affect Highway

Projects that officials say could be affected by postponement of the loans are the construction of the Philippine-Japanese friendship highway, which is a major effort to link several main islands of the Philippine archipelago, the modernization of facilities at eight of the country’s airports, a flood-warning system, telecommunications projects and road building in or near Manila.

Last week’s move, however, does not affect nearly $700 million worth of technical cooperation, grant aid and loans earmarked for the fiscal year ending March 31, or nearly $92 million worth of financing to cover the purchases of mostly Japanese products.

The postponement is likely to have little immediate impact, since there is still about $100 million left from the last budget year.

The total $275-million loan package, covering product purchases and project funding, was signed in Manila on Dec. 23, but the signing of a separate document scheduled for last Wednesday was canceled because of what Foreign Ministry spokesman Yoshio Hatano called “the inconvenience of both sides.”

Foreign Ministry officials said that Japan will renew loans when 90% of the $194 million allotted last year for product purchases has been used up. Philippine buyers so far have spent less than half of the financing that Japan made available last year.