Manila and Beijing have firmed up several economic agreements aimed at boosting the Philippines’ economic growth through the rollout of big-ticket infrastructure projects, the Department of Finance (DOF) said Wednesday.
The agreements were signed on behalf of the Philippines by Finance Secretary Carlos Dominguez III and witnessed by President Duterte and visiting Chinese President Xi Jinping on Tuesday.
The DOF said Dominguez and Chinese Commerce Minister Zhong Shan exchanged documents on the memorandum of understanding (MOU) to jointly promote cooperation for infrastructure projects in the Davao region.
“The MOU outlines the cooperation arrangements between the Philippines and China in implementing big-ticket infrastructure projects in Davao, which initially includes the Davao City Expressway Project, the Davao-Samal Bridge and the Bucana-Davao River Coastal Bypass Road of the Department of Public Works and Highways, and the Mindanao Railway Project of the Department of Transportation (DOTr),” the DOF said.
Also, Dominguez and China International Development Cooperation Agency (Cidca) chair Wang Xiaotao signed an MOU under which the Chinese government would finance feasibility studies for big-ticket infrastructure projects.
The DOF and Cidca also exchanged documents providing financing for new projects under the Philippines-China Agreement on Economic and Technical Cooperation.
“These new projects covered by the 500-million renminbi accord includes financing for the Davao River Bridge (Bucana) Project and the donation of X-ray machines and scanning technologies to the Bureau of Customs and other projects to be mutually agreed upon by the two governments,” according to the DOF.
Another MOU was signed by Dominguez and Bank of China chair Chen Siqing for the future issuance of renminbi-denominated panda bonds.
According to the DOF, “the MOU covers the Philippines’ plan to return to the China Interbank Bond market in 2019 with a possible application for a multitranche 6-billion renminbi bond issuance.
Last March, 1.46 billion renminbi in three-year panda bonds were sold by the Philippine government for the first time in China at a “tight” yield of 5 percent.
The Philippines and China on Tuesday also sealed their first railway agreement under the Duterte administration.
DOTr announced that it signed a consultancy contract with China Railway Design Corp. and Guangzhou Wanan Construction Supervision Co. Ltd. Consortium for the 639-kilometer Philippine National Railways (PNR) South Long-Haul Project, which will link Manila to the Bicol region in Southern Luzon. The signing was witnessed by Mr. Duterte and Chinese President Xi, who concluded a two-day state visit on Wednesday.
The agreement was for a project management consultancy.
This will cover preconstruction activities such as surveys (topographic, geo-technical, hydrological, parcellary, environmental), pre-paration of designs for bidding, preparation of bidding documents, bidding assistance, construction supervision and defects liability period supervision.
The PNR South Long-Haul Project is among the projects that will be funded by Chinese overseas development assistance loans. As such, the contractors would be selected from a list recommended by the Chinese government.
A DOTr spokesperson said the loan agreement itself would be signed around December this year. However, additional details were not released.
The railway project has an estimated budget of P151 billion, information posted on the government’s “Build, Build, Build” infrastructure website showed.
“I am very happy with our partnership with the Chinese Consortium as this is our first contract with China for our railways sector. I am hoping that we continue this arrangement for more projects, including our Clark-to-Subic Railway project that I am hoping to be signed before the end of the year,” Transportation Secretary Arthur Tugade said.
The Chinese government is also expected to fund a significant portion of the 1,500-km Mindanao railway project, which will connect Davao, Iligan, Cagayan de Oro, General Santos and Zamboanga.
Mass transit systems such as trains form a key component of the administration’s P8-trillion infrastructure program. The initiative includes the country’s first subway project in Metro Manila and a railway system from Manila to the Clark Freeport Zone in Pampanga province.
Both projects will be funded through loans from the Japanese government.
Apart from the subway, which will be finished by 2025, the DOTr had said it intended to complete most of the railway projects before Mr. Duterte steps down in 2022.