The Philippines government is seeking 140 billion pesos (US$2.8 billion) from China to fund three important infrastructure projects.
Philippines Finance Secretary Carlos Dominguez was quoted in local media as saying that the government is in talks with Beijing for US$2.8 billion worth of debt funding, on the Chico River Pump Irrigation System, the New Centennial Water Source-Kaliwa Dam, and the southern portion of the North to South Railway spanning Manila to Legaspi City.
A Philippine National Railway train. Photo: Judgefloro/Wikipedia
The loans would all fall under US$9 billion of development assistance and commercial loans announced by President Xi Jinping and President Duterte when the two met in Beijing last October.
Duterte has a strained relationship with the Unites States at present, having come under criticism on human rights issues as he wages his war on drugs. This has led to some tense exchanges between the two countries, though during the recent visit by US Secretary of State Rex Tillerson to Manila the tone was friendlier. Nonetheless, Duterte has made it clear that he is not totally reliant on US aid and support, and can rely on China for big infrastructure projects.
In addition to official support from China, the Philippines is also negotiating with the Asian Infrastructure Investment Bank (AIIB) for debt finance on projects. A US$470 million Manila flood control project is likely to be co-financed with the World Bank, and a US$756 million bus system, which includes construction of 63 stations, would be partly funded by the Asian Development Bank.
In another sign of growing economic ties with China, The Philippines is also preparing for its debut Panda bond (an RMB-denominated bond sold in the Chinese domestic market by a foreign issuer). The debut offering is likely to be for around 1.5 billion yuan.