THE Philippines borrowed 2.34-billion renminbi (about P17.39 billion or $362 million) from China to fund the construction of a 2-way, 4-lane bridge expected to cut travel time from Davao City and the City of Samal in Mindanao.
The concessional loan for the Samal Island-Davao City Connector (SIDC) project is also the first renminbi-denominated loan secured from China under the Duterte administration.
Finance Secretary Carlos G. Dominguez III and Chinese Ambassador to the Philippines Huang Xilian exchanged the loan documents on Monday afternoon at the Department of Finance (DOF) as the two countries recently celebrated the 47th anniversary of their diplomatic relations and the 21st commemoration of the Filipino-Chinese Friendship Day last June 9.
The concessional loan will cover 90 percent of the P19.32-billion worth of financing needed for the SIDC project’s design-and-build contract. With an interest rate of 2 percent per annum, the loan is payable in 20 years, inclusive of a 7-year grace period.
The construction of the 3.86-kilometer SIDC bridge is expected to reduce the dependency of commuters on ferry services between Davao City and Samal Island.
The Department of Public Works and Highways, the main project implementor, entered into an agreement with the China Road and Bridge Corp. for the bridge construction, according to documents from the DOF.
To date, China’s total financing commitments to the Philippines now amount to $1.1 billion. These include loans for the following: Chico River Pump Irrigation project of the National Irrigation Administration (NIA); the New Centennial Water Source-Kaliwa Dam project of the Metropolitan Waterworks and Sewerage System (MWSS); and, the Project Management Consultancy (PMC) of the Philippine National Railways (PNR) South Long Haul project of the Department of Transportation (DOTr).
The DOF said the SIDC project complements the “Mindanao Spatial Strategy/Development Framework 2015-2045,” the “Davao Regional Development Plan” and the “Davao Gulf Area Development Plan 2011-2030.” These, the DOF said, aim to facilitate commerce and trade, generate jobs, create wealth among the local government units in Mindanao, and share the benefits of its growth to more remote municipalities, including Samal Island.
Also expected to benefit from the SIDC project is the Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area Cooperation (BIMP-EAGA), which aims to promote economic development in underdeveloped and geographically remote regions in its member countries.
The loan from China was announced after the Department of Foreign Affairs said it has lodged a diplomatic protest with the Chinese Embassy in Manila to officially complain against the so-called “interference” in the “legitimate” activities of the Philippine government in the Ayungin Shoal. (See related story: https://businessmirror.com.ph/2022/06/13/afp-backs-dfa-protests-over-china-reef-swarm-blockade/)