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China still keen on funding part of Mindanao Railway

By: - Reporter / @bendeveraINQ
/ 05:30 AM July 20, 2019

China is still interested to lend the Philippines money to build the more expensive initial segment of the Mindanao Railway that will run through the Davao Region.

“China is willing to finance [Mindanao Railway’s Tagum-Davao-Digos segment]. The question is if it makes sense for us to have them finance it,” Finance Undersecretary Mark Dennis Y.C. Joven said in a chance interview on the sidelines of the Development Budget Coordination Committee (DBCC) meeting on Thursday.

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Given that the National Economic and Development Authority’s Investment Coordination Committee-Cabinet Committee (Neda ICC-CabCom) approved a higher project cost of P82.9 billion—more than double the earlier P35.9 billion approved by the Neda Board in 2017, Joven said the government needed more financing to roll it out.

“But even then, we need to determine which among all our [financing] sources will give the most favorable terms,” he said.

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Asked if Japan could still snatch the project from China, Joven said the Japanese government had already a lot on its plate. Its aid agency, Japan International Cooperation Agency (Jica), will be financing big-ticket railway projects such as the Light Rail Transit Line 1 Cavite Extension, LRT Line 2 East Extension, Metro Manila Subway, Metro Rail Transit (MRT) Line 3 Rehabilitation, and North-South Commuter Railway, he said.

“I guess [Japan still can] but I don’t think they would still add more [projects for financing],” Joven said.

Last week, the ICC-CabCom green-lighted the plan to build an additional Davao Satellite Depot for Mindanao Railway Project-Phase 1, hence increasing its project cost.

In April, Neda said in a report that the 102-kilometer non-electrified, single-track railway to be built in Region 11 by the Department of Transportation (DOTr) would be funded with official development assistance (ODA).

In May, Socioeconomic Planning Secretary and Neda chief Ernesto M. Pernia said the project would be financed by China.

In October last year, the ICC-CabCom approved the change in financing to ODA from local funding and instructed the DOTr to revisit the project’s Neda Board-approved scope.

But Neda Undersecretary Jonathan L. Uy told the Inquirer last Monday that despite the change in project cost, “it is a locally funded project right now.”

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So far, there were “no formal endorsements yet between the Philippine and Chinese governments” for any loan, Uy said in a text message.

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TAGS: China, foreign loans, Investment Coordination Committee-Cabinet Committee, railway project
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