MANILA - The remaining phases of the railway project in the Philippines' southern island of Mindanao will be financed by a loan from China, according to the Department of Transportation.

Transportation Undersecretary Timothy John Batan said Phase 1 of the project is being funded through the government budget or the General Appropriations Act (GAA), reported The Philippine Star.

"Phase one is GAA, the rest is China," Batan said. He, however, did not disclose the cost of the next phases.

Phase 1 of the Mindanao railway project involves the 102.9-km Tagum-Davao-Digos Segment which costs 31.9 billion pesos (S$807.8 million).

The Tagum-Davao-Digos Segment is expected to reduce travel time from Tagum City, Davao del Norte to Digos City, Davao del Sur from 3.5 hours to 1.3 hours once it starts operating in 2022.

Design and construction of the project will begin by the third quarter of this year.

Meanwhile, Batan also said construction of the railway project from Manila to Bicol region in southern Luzon is expected to start by the end of the year, according to The Philippine Star.

The railway project, expected to cost 175 billion pesos, will also be funded by China. Batan said China will provide the exact amount of the actual winning bidder's contract.

The project involves the construction of nine train stations. Construction of the railway is expected to be completed by 2022.