Philippines drops China loans for 2 projects

MANILA, Philippines — The Philippines continues to withdraw infrastructure ties with China after the government decided to drop Beijing for two more railway projects with a combined cost of nearly P200 billion.

Finance Secretary Benjamin Diokno said the government is now exploring other countries after it decided to let go of China as a funding source for two more railway projects.

These projects are the P142-billion Philippine National Railways South Long Haul, also called the PNR Bicol project, and the P50-billion Subic-Clark Railway.

This developed barely two weeks after the Department of Finance pulled out the country’s request for official development assistance (ODA) from Beijing for the P83-billion Mindanao Railway Phase 1.

“It (loan financing) will no longer continue. For the Clark to Subic, then for Bicol and the one in Mindanao,” Diokno told reporters on the sidelines of the bell ringing ceremony of the retail dollar bond issuance yesterday.

“Because we need to do those projects, but the negotiations are slow. It’s not moving, so we have to explore other sources,” he said.

Despite withdrawing from China, the Finance chief maintained that the railway projects would continue because feasibility studies have been completed already.

For the Mindanao railway, Diokno said the government may consider ODA from Japan.

“India has also expressed interest,” Diokno said.

“Most likely, around the first quarter of next year, we will have another source. We are already looking right now, it could be a combination of Japan and ADB (Asian Development Bank),” he said.

The first segment of the Mindanao Railway Project will cover 102 kilometers all in all, crossing Digos City, Davao City and Tagum City, and it is expected to cut travel time from end to end to just 1.3 hours.

For PNR Bicol, it was only in March this year when the government refiled its loan application with the Export–Import Bank of China.

The DOF even explored the possibility of a blended currency mechanism to fast- track the approval from the Chinese government for the P142-billion railway project in Bicol.

The 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.

Meanwhile, the Subic-Clark project involves the construction of about 70 kilometers of rail in Central Luzon and would run on an exclusive right-of-way parallel to the Subic-Clark-Tarlac Expressway.