China loan pacts for Philip­pine in­fra projects to be signed on Xi’s visit

The Nation - - AEC -

AT LEAST 10 loan agree­ments for in­fra­struc­ture projects will be signed when Chi­nese Pres­i­dent Xi Jin­ping vis­its the Philip­pines in Novem­ber, Bud­get Sec­re­tary Ben­jamin Dio­kno said.

While the Philip­pine and Chi­nese sides fast- track the fi­nanc­ing for big-ticket in­fra­struc­ture, Dio­kno told re­porters on the side­lines of a press brief­ing that the gov­ern­ment was “very care­ful” with its eval­u­a­tion of projects.

“First of all, there’s a fea­si­bil­ity study, ei­ther funded by the Asian De­vel­op­ment Bank or the World Bank. Af­ter that, the im­ple­ment­ing agen­cies will iron them out and then sub­mit to the Na­tional Eco­nomic and De­vel­op­ment Au­thor­ity.

“In Neda, the In­vest­ment Co­or­di­na­tion Com­mit­tee will scru­ti­nise them be­fore sub­mit­ting to the pres­i­dent,” Dio­kno ex­plained.

“We are very care­ful in the process. And our rule of thumb is, if the project gives us a rate of re­turn of at least 10 per­cent or higher, then it’s a go be­cause we can bor­row at a much lower cost,” Dio­kno added.

In a sep­a­rate state­ment, Dio­kno as­sured the public that the Philip­pine gov­ern­ment was ex­er­cis­ing due dili­gence in pro­cess­ing the ap­proval of the projects.

A loan from China was al­ready ex­tended to the Na­tional Ir­ri­ga­tion Au­thor­ity’s 4.4-bil­lion-peso Chico River pump ir­ri­ga­tion project.

So far, the Duterte ad­min­is­tra­tion has signed only one Chi­nese loan agree­ment, worth 3.14 bil­lion pe­sos for the ir­ri­ga­tion fa­cil­ity, the first flag­ship in­fra­struc­ture project to be fi­nanced by the main­land un­der the am­bi­tious “Build, Build, Build” pro­gramme.

The US$62.09-mil­lion de­nom­i­nated loan will cover 85 per cent of the to­tal con­tract amount of 3.7 bil­lion pe­sod and car­ried an in­ter­est of 2 per cent a year, ma­tur­ing in 20 years in­clu­sive of a seven-year grace pe­riod.

Be­sides the Chico River ir­ri­ga­tion, the other projects in­cluded in the first bas­ket for Chi­nese fi­nanc­ing are the New Cen­ten­nial Water Source-Kaliwa Dam, the Philip­pine Na­tional Rail­ways’ South Long- Haul as well as the Bin on do-In­tra mu ros and Estrel­laPan tale on bridges cross­ing Pasig River.

The two bridges are funded by 6 bil­lion pe­sos in grants and al­ready broke ground in July as these are tar­geted to be both com­pleted in 2020.

The sec­ond bas­ket of projects in­cluded the Am­bal-Simuay River and Rio Grande de Min­danao River flood con­trol projects, five bridges cross­ing Pasig- Marik­ina River and Mang­ga­han Flood­way, Safe Philip­pines Project Phase

1 as well as the Subic- Clark Rail­way.

SO FAR, THE DUTERTE AD­MIN­IS­TRA­TION HAS SIGNED ONLY ONE CHI­NESE LOAN AGREE­MENT, WORTH 3.14 BIL­LION PE­SOS FOR THE IR­RI­GA­TION FA­CIL­ITY, THE FIRST FLAG­SHIP IN­FRA­STRUC­TURE PROJECT TO BE FI­NANCED BY THE MAIN­LAND UN­DER THE AM­BI­TIOUS “BUILD, BUILD, BUILD” PRO­GRAMME.

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