Laguna Lake Groups Reject $10-M Loan from World Bank


MANILA — Not interested.

Community groups working with the fisherfolk alliance Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya) and the Save Laguna Lake Movement (SLLM) have reacted in the negative to reports that the Aquino government has accepted a $ 10-million loan from World Bank in connection with Laguna Lake rehabilitation project.

Presidential spokesman Edwin Lacierda recently announced that the National Economic and Development Authority (NEDA) chaired by President Benigno Aquino has approved the loan.

WB officials have clarified that the loan is not meant for dredging the heavily silted waters of the Laguna Lake.

“The main focus of the project is reduction in industrial waste water, treatment of household waste water, along with improved collection of solid waste, and some minor investments in ecotourism so as to generate employment,” the bank said. The WB is now behind the funding of the Laguna de Bay Institutional Strengthening and Community Participation (Liscop) project, which began in 2004. The World Bank finances the Liscop.

Pamalakaya chairman Fernando Hicap said that instead of entertaining foreign loans with inevitably questionable agenda and with steel cable-strings attached, the Philippine government through the Laguna Lake Development Authority (LLDA) should dialogue with fisherfolk and other affected residents to determine the appropriate solutions the long-running chaos of environmental destruction and loss of people’s livelihood in the 94,000 hectare lake.

“We keep asserting that a comprehensive dialogue with residents and crucial stake-holders in the Laguna lake area should come first. There must be consultations with the residents and the fisherfolk beforethe government can embark on any project or accept any loan for the rehabilitation or for whatever purpose concerning the lake,” said Hicap.

Pamalakaya has previously called for the scrapping of the government’s P 200-billion ring dike project that will cover a 100 kilometers circular stretch of the lake. It said that the project will immediately result in the demolition of homes of some 400,000 families in the area.

“We cannot rehabilitate the lake without the participation of the people, said Hicap.

According to environmental groups, the lake used to be a great source of freshwater fish such as kanduli, hito, dalag,tinikan, ayungin and biya. Because of pollution, the fish have all but disappeared and the lake waters is now populated by carnivorous and inedible janitor fish which thrives mostly on dirty water.

The Millennium Ecosystem Assessment in 2005 and a study from the University of the Philippines in Los Banos said that some parts of the lake contain toxic metals such as lead, zinc, copper and chromium.

LGU gives the go signal to projects

The local government of Laguna, however, seems to have given the go signal to any and all government projects when it comes to the lake.

Laguna Governor Jeorge Ejercito along with 30 mayors of Laguna sent an open letter to Aquino appealing ‘to save and revive the bounty and grandeur of the lake.”

Ejercito and the 30 Laguna mayors said because of pollution and dumping of waste materials, fish kills are now a regular occurrence in the lake to the detriment of the consuming public and the hundreds of thousands relying on the lake for their livelihood.

The Laguna provincial officials proposed the holding of a summit meeting among local government officials within the Laguna lake to discuss various solutions such as a rehabilitation programs that include the building environmental-friendly and multi-purpose embankments to prevent siltation and inflow of floodwaters; the dredging of major rivers; the building of a water impounding structure to harness run-off water for water supply and flood control and the development of resettlement area for informal settlers.

Ejercito also called on the Aquino government to establish an alternate lakeshore highway that connects the Southern Luzon Expressway to Laguna and to develop a tourist-oriented ferry and boat system to attract local and foreign visitors.

Enormous interest rates for foreign loans

On the matter of foreign loans for local government projects, independent think IBON Databank said that any future devaluations of the peso against the US dollar would also further increase the burden of the loan in peso terms.

This means that the $200 million loan from the WB for the Laguna Lake will actually amount to millions more when time comes for the WB to begin collecting payments.

According to IBON, interest rates are currently down because of the global crisis; but as the global economy gets better, the irony is that the loan burden gets heavier in the same way as the dollar strengthens.

IBON has also criticized another project which the WB has funded in tandem with the Asian Development Bank (ADB). The think-thank called on lawmakers deliberating on the budget for the controversial Conditional Cash Transfer (CCT) Program to look into the resulting additional debt burden that Filipinos will shoulder to repay the program’s loans. The WB has given $405 M while the ADB released $400M for the CCT program.

Depending on interest rate trends, initial IBON estimates that the Philippines total loan service for the CCT program could reach at least US$1 billion (P44 billion at current exchange rates).

This includes US$202 million (P8.9 billion) in projected interest payments, with $95 million going to the WB and $107 M to the ADB. These already include a $1,012,500 front-end fee (a percentage payable once usually at the loan signing) to the WB. The loan from the WB will have to be repaid over 20 years but with a 10-year grace period, while the ADB loan is to be paid over 25 years with a grace period of 5 years when the principal does not yet have to be repaid.

“ The increased indebtedness that the CCT program will impose on Filipino taxpayers is further argument against the supposed benefits of the program,” said IBON. (

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