CHINA EXTENDS $100-MILLION LOAN TO DEVELOP RP COCONUT INDUSTRY
MANILA, March 3, 2004 (STAR) By Rocel C. Felix - The state-controlled China National Technical Import and Export Corp. (CNTIC) is extending a $100-million soft loan facility for the Coconut Commodity Development Project (CCDP) of the Philippine Coconut Authority (PCA).
"The loan should bolster the local coconut industry’s efforts to develop value-added products for the export market," PCA Administrator Danilo Coronacion said.
The CNTIC and the PCA signed recently a memoradum of understanding to facilitate the issuance of a guarantee by the Philippine government.
"A big bulk of the loan will be used for the development of some 400,000 hectares of our coconut lands to enable us to commercially produce geotextiles, coco-peat and other high-value coconut products for export to China for anti-desertification and soil erosion applications," Coronacion said.
Geotextiles are synthetic permeable textile materials used with soil, rock, or any other geotechnical engineering related material. Also known as geosynthetics, geotextiles are generally associated with high-standard, all-season roads but can also be used in low-standard logging roads.
Geotextiles extend the service life of roads, increasing their load-carrying capacity and reducing the incidence of ruts. For temporary road construction in environmentally sensitive areas, a biodegredable woven jute geotextile has been developed.
Some $40 million will be allocated for farm inputs like fertilizers, to enhance productivity of coconut trees in identified areas while $15 million will be used to finance the development of hybrid seeds for the intercropping component of the project that includes production of ramie, kenaf, corn, tea and other cash crops.
Coronacion said another $40 million will be used for machinery and equipment needed to put up activated carbon and coco coir processing facilities like decorticating machines and twining machines for fiber and geotextile processing.
The balance will be used to buy tractors, pumps and other facilities that will be used to produce and process intercrops.
The loan carries a three percent interest charge per annum and payable in 15 years with a three-year grace period.
China is losing about 2,400 square kilometers of its land to desertification each year and urgently needs the same size of geotextiles to arrest the problem.
While it has turned to Sri Lanka, India and Vietnam for its requirements, China wants the Philippines to supply even just a fourth of its geotextile needs, a demand which the country cannot supply for now because for decades it concentrated on developing mainly its copra and coconut oil sectors.
Based on PCA pre-feasibility studies, it will be easy to repay the amount since geotextiles produced by the project will be bought by China, which is currently in dire need of these materials to control its desertification and soil erosion problem.
Reported by: Sol Jose Vanzi
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