MANILA, Philippines — The Department of Transportation (DOTr) expects negotiations with China for railway financing to resume soon, picking up momentum from the recent state visit of President Marcos to China.
Transportation Undersecretary Cesar Chavez told The STAR that the DOTr expects to return to the negotiating table with China soon to discuss the terms for the railway loans sought by the Philippines.
In particular, the DOTr wants to prioritize the loan application for the P142-billion rail line linking Metro Manila with the southern areas in Luzon, specifically Southern Tagalog and Bicol Region.
The Philippine National Railways South Long Haul, also called PNR Bicol, will extend for 639 kilometers with 35 stations in total. The project will connect regions around Luzon with the objective of improving trade and travel across the island.
“We hope (talks will resume soon). The Department of Finance has already reapplied the South Long Haul to Exim Bank of China,” Chavez said.
Finance Undersecretary Mark Dennis Joven confirmed that the Department of Finance has filed the loan application for PNR Bicol and that the government is waiting for China to respond to its request.
“We confirm that the loan application for PNR South Long Haul has been refiled with the CEXIM (Import-Export bank of China) and we are awaiting action on this,” Joven told The STAR.
Joven said that Marcos, in his visit to Beijing, discussed with Chinese President Xi Jinping in broad terms the loan the Philippines is seeking to build the Metro Manila to Bicol Region railway.
Last year, the Philippines decided to withdraw its financing request from China to fund three rail lines, including PNR Bicol Package 1. According to then finance secretary Carlos Dominguez, the government had to take back the loan application because Beijing failed to act on it.
Further, Dominguez warned the Marcos administration that China would slap an interest rate of three percent, exceeding the level charged by alternative financiers like Japan’s 0.1 percent.
Despite the warning from Dominguez, Marcos instructed his economic team to ask Beijing again for the loans.
Transportation Secretary Jaime Bautista said the loan application for the PNR South Long Haul was prioritized, as the country had talked to China about it, from feasibility to design.
Apart from PNR Bicol Package 1, China was supposed to provide the capital for the delivery of the P83- billion Mindanao Railway Phase 1 and P50-billion Subic-Clark Railway Project, although these proposed railways are expected to be offered to the private sector as well.