A total of $7.34 billion in loans and grants have already been committed by China to finance not only the Duterte administration’s ambitious infrastructure program but also the reconstruction and rehabilitation of Marawi City, the Department of Finance said yesterday.
In a statement, the DOF said that to date, the Chinese government’s pledges for loans to the Philippines’ infrastructure, power and public safety sectors amounted to $7.19 billion.
“Of the $7.19 billion, about $3.98 billion—representing the estimated loan amount of the second basket [of projects to be financed by China] under various stages of preparation—will still be further discussed and processed by both sides,” the DOF explained.
The loans were on top of $148.22 million in grants, a part of which will be spent to reconstruct as well as rehabilitate war-torn Marawi, the DOF added.
The combined grants and loans will support 10 big-ticket projects, the construction of two bridges crossing Pasig River as well as two drug rehabilitation facilities in Mindanao, according to the DOF.
“The assumed loan amount pledged by China accounts for 85 percent of the total cost for 10 projects. These cover soft loans under the first basket of projects that include $234.92 million for the Kaliwa-New Centennial Water Source in Quezon province; $72.49 million for the Chico River Pump Irrigation Project in North Luzon, and the $2.91-billion Philippine National Railways South Long Haul Railway—or a total estimated loan amount of $3.21 billion,” the DOF said, citing a report of its international finance group.
“For the second basket of projects, the Philippines and China agreed to line up an estimated total of $3.98 billion in loans that might include $947.64 million for the Subic-Clark Railway and $424.81 million for the Davao City Expressway,” the DOF said, noting that most of these projects were still in the feasibility study stages, hence have preliminary project costs.
According to the DOF, “the agreements for several of these projects are set to be signed between officials of the two governments during the Philippines-China bilateral meetings to be held on the sidelines of the Asean+3 (China, Japan and South Korea) Summit this week.”
Chinese Premier Li Keqiang would represent Chinese President Xi Jinping during the Asean Summit and related meetings and was expected to witness the signing of the bilateral agreements, the DOF noted.
The bulk of the grants from China amounting to $99.27 million will be used to build the Binondo-Intramuros and Estrella-Pantaleon bridges.
“The grant amount, which covers 100 percent of the total cost for the projects, also includes $22.95 million for the construction of two drug rehabilitation facilities; $23 million to aid in Marawi’s rehabilitation program, and donation of heavy equipment worth $3 million also for the government’s reconstruction efforts in Marawi,” according to the DOF.
“The record inflows of grants and soft loans from China are among the fruits of President Duterte’s foreign policy rebalancing geared toward accelerated integration with the country’s Asean neighbors and East Asian trading partners China, Japan and South Korea,” Finance Secretary Carlos G. Dominguez III said.