The Philippines and Japan have signed a P25-billion loan agreement that will further boost maritime safety in the country.

Finance Secretary Ralph Recto yesterday led the signing of the loan agreement worth JPY64.38 billion (P24.57 billion) for the third phase of the Maritime Safety Capability Improvement Project (MSCIP) for the Philippine Coast Guard (PCG).

Recto was joined by Ambassador of Japan to the Philippines Kazuya Endo, Japan International Cooperation Agency (JICA) chief representative Takema Sakamoto, Transportation Secretary Jaime Bautista and Commandant Coast Guard Admiral Ronnie Gavan.

Funded by JICA, Japan's bilateral aid agency, the MSCIP has been instrumental in enhancing the PCG's capabilities to safeguard the Philippine waters.

For the third tranche, five new 97-meter top-of-the-line multi-role response vessels will be added to PCG's fleet.

The latest loan agreement has an interest rate of 0.3 percent per year and a repayment period of 40 years including a 10-year grace period.

The new vessels are expected to enhance PCG's ability to prevent piracy, protect the environment, counter smuggling and immediately respond to search and rescue operations.

This follows the first tranche in December 2013 for 10 44-meter vessels worth JPY18.7 billion and the second phase in October 2016 for two 97-meter vessels amounting to JPY16.7 billion.

Recto maintained that without effective patrol, the country's territorial seas are open to poachers and intruders that take away resources from Filipinos.

'It is critical to fully equip the PCG with cutting-edge vessels to fulfill its mission as the guardian of our seas-protecting our maritime sovereignty and defending the rights of Filipino fisherfolk,' Recto said.

The finance chief maintained that the loan will not only strengthen national security, but also complement the government's broader infrastructure modernization program to spur growth.

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