Manila seeks billions in loans from China

Funds sought for 15 projects, including key railway line, dam and irrigation works

The Philippines has pitched for China to fund a key railway line connecting Manila to the southern part of the main island of Luzon and 39 other projects, as Manila and Beijing cement renewed economic ties under President Rodrigo Duterte.

Finance Secretary Carlos Dominguez said a high-level delegation of economic managers sought US$3.01 billion (S$4.3 billion) in loans for the railway line during two days of meetings in China.

They also asked for US$374.03 million for a dam and US$53.6 million for an irrigation project.

The rest are for smaller projects, such as the construction of bridges across a major waterway in Manila.

Mr Dominguez said the Philippines sought loans for 15 projects and funding for feasibility studies on 25 others.

The railway, a campaign promise by Mr Duterte, will span 653km from Manila to Legazpi city in Albay province. It will cover key economic zones south of the capital. The project aims to help stimulate growth outside Manila, and ease traffic congestion and population growth in the city.

"The generous assistance offered by China to the Philippines is among the concrete results of the President's foreign policy rebalancing towards accelerated integration with Asean and its major Asian trading partners," said Mr Dominguez.

Ties between the Philippines and China were strained under former president Benigno Aquino because of disputes over international waters in the South China Sea.

But since taking office last year, Mr Duterte has pivoted towards China at the expense of his nation's ties with its longtime ally, the United States. He has chafed at Washington's criticism of his controversial war on crime, and has looked at Beijing as a more open-minded partner.

Beijing has responded to this new rapprochement with more than US$24 billion in investment and financing pledges that Mr Duterte secured during his four-day state visit to China last October.

Mr Duterte's economic managers went to China this week to meet Commerce Ministry officials. Apart from Mr Dominguez, the delegation included Budget Secretary Benjamin Diokno, Economic Planning Secretary Ernesto Pernia, Transportation Secretary Arthur Tugade and Public Works Secretary Mark Villar.

Mr Dominguez said that these meetings were a "productive first step towards achieving the desire of President Duterte and Chinese President Xi Jinping in further reinforcing ties between the two countries".

"My expectation is that the projects we have discussed would be implemented very quickly and that they would benefit both the people of China and the Philippines," he added.

Mr Dominguez said that the two sides would meet in Manila next month to thrash out details of the projects submitted for Chinese assistance.

A version of this article appeared in the print edition of The Straits Times on January 28, 2017, with the headline 'Manila seeks billions in loans from China'. Print Edition | Subscribe