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Philippines to Rework $4.9 Billion Loans for China Rail Projects

Transportation Undersecretary Cesar Chavez said development aid loan deals for three projects were deemed “withdrawn” after China “failed to act on funding requests”


Philippines President Ferdinand "Bongbong" Marcos Jr.
Philippines President Ferdinand "Bongbong" Marcos Jr., the son and namesake of the late dictator Ferdinand Marcos, delivers a speech during the inauguration ceremony at the National Museum in Manila, Philippines, June 30, 2022. REUTERS/Eloisa Lopez

 

Philippines President Ferdinand Marcos Jr has asked his transport ministry to rework loan deals struck by predecessor Rodrigo Duterte with China for rail projects worth $4.90 billion, an official said.

Transportation Undersecretary Cesar Chavez said development aid loan deals for the three projects were deemed “withdrawn” after China “failed to act on funding requests” made by Duterte.

Chavez said he was looking into other funding options for the projects worth 276 billion Philippine pesos: the Subic-Clark Railway Project, the Philippine National Railways South Long-Haul Project and the Davao-Digos segment of the Mindanao Railway Project.

Options include tapping private capital through a public private partnership, he said.

A Chinese official said on condition of anonymity: “China-Philippines cooperation over railways will continue. China is open for discussions with the Philippines.”

From more than 1,100 km (680 miles) before World War II, the Philippines had only 77 km of operational railway as of 2016, well behind other urban centres in Asia, government data show.

Negotiations for the rail projects began in 2018, during the administration of Duterte, who pursued warmer ties with Beijing, setting aside a longstanding territorial spat over the South China Sea in exchange for billions of dollars of aid, loans and investment pledges, including for his infrastructure programme.

Marcos has vowed to defend national sovereignty but has spoken strongly of the need to enhance ties with China in other areas.

 

  • Reuters with additional editing by Sean O’Meara

 

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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