WASHINGTON/SEOUL -- South Korea's possible funding of the construction of a US base on Korean soil for the THAAD missile defense system has been "addressed," a US budget proposal has shown, which could run counter to the allies' agreement on the issue.

According to the fiscal year 2021 budget proposal of the Department of the Army dated Feb. 3, 2020, the US earmarked $49 million for the development of the South's Seongju area, where its Terminal High Altitude Area Defense (THAAD) battery is installed.

It is the first time that the US government has set aside a budget for the site. US Forces Korea set up a full six-launcher THAAD battery in the southern provincial town of Seongju, North Gyeongsang Province, as part of efforts to better cope with growing missile threats from North Korea.

Of the total, around $36 million was earmarked for primary facilities, including three earth-covered magazines, site security and lighting, while supporting infrastructure such as electricity and sewers will cost $6.85 million, according to the proposal.

Noting that the installation requires such infrastructure to support its personnel, equipment and operational mission, the report read, "The possibility of Host Nation funding has been addressed."

It then added, "Funds from Host Nations programs are available to support this requirement."

The proposal comes as the allies have been in tough negotiations over the Special Measures Agreement, which stipulates Seoul's share of the cost for the upkeep of the 28,500-strong USFK.

Some have raised suspicions that the US might aim to include the base construction in the deal and thus have Seoul partly pay for it, though Washington is supposed to cover the cost for THAAD base construction in South Korea in accordance with the allies' related agreement in 2017. The U.S. has called for a hefty increase in Seoul's payments in this year's SMA talks.

South Korean officials, however, said that the Seongju base construction issue has not been on the table in the SMA talks.

"Any details regarding the base construction could be discussed after wrapping up the ongoing environmental survey of the site," a ministry official said, adding that Seoul is supposed to provide the site and the burdens for building facilities fall on the US.

South Korea has yet to conduct a full-scale environmental survey of the Seonju site, and residents there have strongly protested the deployment.

China has also adamantly objected to the system's presence on the Korean Peninsula, claiming that it hurts its security interests.

As an integral part of the US-led missile-defense system, THAAD is designed to shoot down short-, medium- and intermediate-range ballistic missiles at a higher altitude in their terminal phase using a hit-to-kill method.

S. Korea to spare no efforts to minimize economic impact of coronavirus

South Korea will spare no efforts to minimize the economic fallout of the new coronavirus and draw up additional measures to support an economic recovery, Finance Minister Hong Nam-ki said Friday.

Hong made the remarks in a meeting with Bank of Korea Gov. Lee Ju-yeol on Friday to discuss how to cope with the economic impact of the virus, which was recently named COVID-19.

Hong also urged people to carry out "normal economic activities," saying private consumption was hit by the spread of the virus.

It was the first time the two men have met since August last year, when they discussed measures to deal with Japan's export curbs of key materials targeting South Korea.

The market is increasingly betting that the central bank will cut its key rate at its policy meeting on Feb. 27 to preemptively cope with the economic fallout of the virus.

Hong urged people not to be too cautious and to go on with everyday activities, as the government has been working on the full control of the disease, including infection prevention.

Hong said the government will swiftly come up with additional measures to help cushion local firms from the economic impact of the virus.

Such measures include policy tools to boost local tourism, aviation, exports and private consumption, Hong said.

South Korea has so far reported 28 confirmed cases of the virus, but the number has remained unchanged since Tuesday. Seven of the diagnosed patients have been released from quarantine after fully recovering.

Last week, the finance ministry said it will provide 2 trillion won ($1.7 billion) in financial support to small merchants who are expected to be hurt by the spread of the virus.

The government will also provide loans worth 25 billion won with a lower interest rate to small and medium-sized companies.

Financial market volatility had increased due to the spread of the virus, but it has recently shown signs of stabilization, Hong said.

"The government will stay alert to increasing volatility in financial markets, while making our contingency plans ready," Hong said. (Yonhap)