Philippines to rethink rail schemes after Chinese funding delay

The Philippines has ambitious rail plans. Pictured here is work under way in 2018 on Batasan station in Quezon City, part of the Metro Manila Rail Transit 7 scheme (Gil Calinga for the official Philippine News Agency/Public domain)
The Philippine Department of Transportation (DOTr) is reconsidering Chinese loans for three railway projects after Beijing failed to act on funding requests by the Duterte administration, the Philippine News Agency reports.

The three schemes affected are the Subic–Clark Railway, the South Long-Haul Project and the Mindanao Railway Project.

Cesar Chavez, the DOTr’s undersecretary for railways, said negotiations for the schemes began in 2018 and were approved by the country’s National Economic and Development Authority (NEDA).

He said the loan applications to China’s Export Import Bank were only valid until 31 May, after which they would be automatically withdrawn if not approved.

Chavez commented: “In his text message to me this morning, former finance secretary Sonny Dominguez said that he cancelled the applications instead of keeping them in suspended animation. The DOTr understands that this is in light of the upcoming transition of government, and in deference to the incoming administration.”

He added that the DOTr would begin policy discussions with the Department of Finance to decide the future of the three schemes.

“Policy discussion on the way forward for the above three rail projects has also been initiated at the 12 July Cabinet meeting, during which President Ferdinand ‘Bongbong’ Marcos commented that as a matter of policy, we should encourage more investment in rail and that we should focus more on rail transport,” he said.

In January, the contract for the $2.5bn South Long-Haul Project (also called the PNR Bicol Express) was awarded to a consortium made up of China Railway Group, China Railway No 3 Engineering Group, and China Railway Engineering Consulting Group (see further reading).

The contract for the construction of the $940m Subic–Clark Railway Project was awarded to China Harbour Engineering Co. in December 2020.

Further reading:

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