During the 27 November 1999 summit meeting held in Manila between Japanese Prime Minister Keizo Obuchi and Philippine President Joseph E. Estrada, Japan pledged to extend 15.3 billion pesos (39.5 billion yen) in loans to the Philippines through the Special Yen Loans Facility.

Three project have been earmarked for these loans, the "LRT Line 1 Capacity Expansion (Phase II)" project, amounting to approximately 8,635 million pesos (22,262 million yen), designed to ease worsening traffic conditions and improve the environment in Metro Manila; the "Kalookan-Malabon-Navotas-Valenzuela (KAMANAVA) Flood Control and Drainage System Improvement Project ", amounting to approximately 3,464 million pesos (8,929 million yen), designed to lessen flood damage and improve living conditions in the project area through the construction of a ring-dike system and pumping station; and the "Mindanao International Container Terminal Project", amounting to approximately 3,206 million pesos (8,266 million yen), designed to construct a new port that will complement international cargo operations at the Cagayan de Oro Port and promote the further development of Northern Mindanao.

Japan established and announced its Special Yen Loans Facility at the Association of Southeast Asian Nations (ASEAN) Leaders' Summit Meeting, which was held in Hanoi, Vietnam, on 16 December 1998. Japan's Special Yen Loans Facility aims to advance economic activities that have high economy stimulating and employment promoting effects, and to bring about economic structural reform by creating an economic environment conducive to private investment and increased productivity.

In order to minimize the debt burden of the recipient countries, the terms of these loans are set at an interest rate of 1% and have a repayment period of 40 years, including a 10 year grace period. These loans have been designed to make project implementation smoother by covering up to 85% of the total cost of each pro undertaken.

Japan's Special Yen Loans Facility is the latest of Japan's efforts to assist the nations of Southeast Asia in their efforts to develop economically. The Government of Japan believes that through providing appropriate financial assistance to its neighbors in Southeast Asia, it can play a leading role in the full and swift recovery of this important region.