Philippines abandons plan to borrow from China to build railway

Philippines từ bỏ kế hoạch vay Trung Quốc xây 3 tuyến đường sắt - Ảnh 1. — A railway line in the Philippines

Bloomberg reported on October 27 that the Philippines will no longer pursue Chinese loans to finance three railway projects worth more than $5 billion and has begun discussions with other countries in Asia about alternative financing arrangements.

"We see that China is no longer interested, so we will look for other partners," said Philippine Transportation Secretary Jaime Bautista.

China agreed to finance three railway projects near the Philippine capital during the administration of former President Rodrigo Duterte. The government of his successor, President Ferdinand Marcos Jr., has since reconsidered the deals due to lack of progress from China.

Last month, Philippine Finance Secretary Benjamin Diokno informed Chinese Ambassador Huang Xilian that Manila was “no longer inclined to pursue” Chinese funding for the first phase of the Mindanao railway project.

The 100-kilometer project will pass through Duterte’s hometown of Davao and the Philippine government estimates it will cost 81.7 billion pesos ($1.5 billion). The Chinese Embassy in Manila did not immediately respond to a request for comment.

Bautista said the Treasury Department will also send a formal notice of “termination” of funding for the P50-billion Subic-Clark freight railway, which connects two commercial districts that are former US military bases.

The remaining project the Finance Ministry mentioned is the 175.3 billion peso southern Luzon railway.

Switching to other financing options could delay projects critical to the Philippines’ infrastructure push to boost the economy . They were among projects originally scheduled for completion this year.

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Bautista said “at least two other Asian countries” are interested in the Subic-Clark project and the southern Luzon route. He declined to name them because discussions are still preliminary. He added that the government is also considering financing the three projects or partnering with multilateral lenders and private companies.

Bautista did not attribute the stalled Chinese loan deals to geopolitical tensions. “Even before these tensions began, discussions were not progressing,” he said, adding that China would still be welcome to fund other infrastructure projects.

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