Philippines Shuffles Funding Partners for Two Key Railway Projects

The Philippines is reevaluating its infrastructure collaborations with China, opting to shift funding sources for two major railway projects with a total price tag of nearly P200 billion. Finance Secretary Benjamin Diokno announced the government's decision to explore alternative funding options for these projects, officially severing financial ties with China.

The two projects in question are the P142-billion Philippine National Railways South Long Haul, also known as the PNR Bicol project, and the P50-billion Subic-Clark Railway.

This move follows a recent decision by the Department of Finance to withdraw the country's official development assistance (ODA) request from China for the P83-billion Mindanao Railway Phase 1, further solidifying the Philippines' shift away from Chinese financing.

Diokno explained the rationale behind the decision, stating, "It (loan financing) will no longer continue. For the Clark to Subic, then for Bicol and the one in Mindanao. Because we need to do those projects, but the negotiations are slow. It's not moving, so we have to explore other sources."

Despite the change in funding sources, Diokno stressed that the railway projects would continue as planned. Feasibility studies have already been completed, ensuring that the projects remain on track.

For the Mindanao Railway, the government is considering the possibility of official development assistance from Japan. India has also expressed interest in contributing to the project. The government is actively exploring a combination of funding sources, including Japan and the Asian Development Bank (ADB), to ensure the project's continuity.

The first segment of the Mindanao Railway Project will cover a total of 102 kilometers, connecting Digos City, Davao City, and Tagum City. It is expected to significantly reduce travel time between these destinations, bringing it down to just 1.3 hours.

As for the PNR Bicol project, the government had refiled its loan application with the Export-Import Bank of China earlier this year. The project spans an impressive 639 kilometers with 35 stations, aimed at enhancing trade and travel connectivity across Luzon.

The Subic-Clark Railway project, covering approximately 70 kilometers in Central Luzon, will run on an exclusive right-of-way parallel to the Subic-Clark-Tarlac Expressway, further facilitating transportation and commerce in the region.

The Philippines' decision to seek alternative funding sources underscores its commitment to advancing crucial infrastructure projects despite changes in financial partnerships. The nation is determined to boost connectivity, trade, and economic growth through the successful completion of these railway developments.