Government to formalize China, Japan loans for infrastructure

MANILA, Philippines — The Philippines is expected to sign three loan agreements with Japan and another two with China within the first quarter for the implementation of big-ticket infrastructure projects in the country, the Department of Finance (DOF) said yesterday.

In an interview, Finance Undersecretary Mark Dennis Joven said the DOF is looking forward to signing with Japan the Y167.199 billion (P79.69 billion) loan agreement for the North-South Commuter Railway (NSCR) Extension Project, and the Y37.905 billion (P18.61 billion) loan for the Pasig-Marikina River Channel Improvement Project Phase IV within the first quarter.

He said the loan accord for the Road Network Development Project in conflict-affected areas in Mindanao is also expected to be signed with Japan within the first quarter.

Furthermore, Joven said the DOF may sign two loan agreements with Beijing within the first quarter, including those for the Safe Philippines Project Phase I, and consultancy services for the Philippine National Railways (PNR) South Long-Haul Project.

“Basically, we’re timing the engagement with China in time for President Duterte’s visit to China this April,” Joven said.

“For Japan, we’re timing it in time for the Japanese high-level meeting, which will be held in February in Japan,” he said, referring to the seventh meeting of the Philippines-Japan Joint Committee on Infrastructure and Economic Cooperation.

During the previous meeting of the committee in November last year, Manila and Tokyo exchanged notes on the loans for the Pasig-Marikina River Channel Improvement Project Phase IV and the NSCR extension project.

The loan for the Pasig-Marikina River Channel Improvement Project covers the final phase of the project to mitigate the frequent massive flooding caused by the overflow of the Pasig-Marikina River.

Its final stage involves river channel improvement works along the stretch of the Upper Marikina River, from the downstream of the Manggahan Floodway to the Marikina Bridge, and includes the construction of the Marikina control gate structure.

The NSCR extension project, for its part, involves the extension of the railway from Malolos, Bulacan to Clark International Airport (CIA) and from Manila to Calamba, Laguna.

On the other hand, the DOF said China has so far extended a total of $290.8 million in grants to the Philippines.

Beijing also formalized its $62.09 million loan to the Philippines to help implement the Chico River Pump Irrigation Project, which broke ground in June 2018.

Last year, officials of the two countries also exchanged documents on the $211.21 million loan and guarantee agreements for the New Centennial Water Source- Kaliwa Dam Project.

The DOF said Manila and Beijing would continue this year discussions on the second basket of pipeline projects for possible Chinese concessional financing.

“We are fortunate to have the full support from our friends in the region. Both Japan and China have committed about $9 billion each in investments and official development assistance (ODA), while South Korea has pledged up to $1 billion in ODA under President Duterte’s term. These commitments complement the support we are getting from multilateral development institutions,” Finance Secretary Carlos Dominguez said.