The Chinese Embassy in Manila said China is still open to renegotiating deals on the “Build, Build, Build (BBB)” projects initiated by the Duterte administration and that it is confident that the new administration would provide the continuity needed to further boost bilateral relations.
The Embassy issued a statement in response to request for comments from media on the statement made by Transportation Undersecretary Cesar Chavez that China has backed out of talks for the funding of three railway projects—the Philippine National Railway (PNR) Bicol Project, Subic-Clark Railway Project and the first phase of the Mindanao Railway Project.
“Our two sides have been negotiating technical issues and made positive progress to move the projects forward. China is open for technical discussions over our G-to-G [government-to-government] projects, and is ready to carry our cooperation forward, in close communication with the Philippine new administration,” the Embassy spokesman said in a statement.
The Embassy claimed China has “comprehensive strength” in the area of infrastructure development and it “is well-known for its quality and speed.’’
Former Finance Secretary Carlos G. Dominguez III had said the Beijing-based Export-Import Bank of China (Ceximbank) would have imposed at least a 3-percent interest rate on the three railway projects, as Ceximbank had indicated that it intends to recover “at least marginal funding cost.” If this deal pushed through, it would have been way higher than the 0.1 percent being offered by the Japanese government for other infrastructure loan projects.
“China will tap its own advantage and support the Philippines to improve its infrastructure,” the Chinese Embassy said.
It noted that during the past six years of the Duterte administration, the Philippines and China have “fruitful results and delivered tangible benefits” under the Belt and Road Initiative of China and BBB projects of the Philippines with the completion of 17 projects. More than 20 G-to-G project deals have yet to be finalized.
“Over the past two years, Covid-19 has impacted implementation of some projects, hindering the site availability, causing delays of procurement, affecting goods mobility, and so on. Despite those difficulties and challenges, our two sides have worked tirelessly to push the projects forward and yielded rich outcomes, spanning from anti-pandemic response, disaster relief to infrastructure, agriculture, and other fields,” the Embassy said.
The Embassy said that based on the phone conversation between Chinese President Xi Jinping and President Marcos Jr. and the recent high-level visits, both governments are “dedicated to further enhancing friendship and mutual trust.”
“China’s policy towards the Philippines has always been and will continue to be consistent and stable as ever. It is also believed that continuity would be secured in our relations as well as the bilateral practical cooperation. Looking forward, China will build on the past fruition and further our cooperation in agriculture, infrastructure, energy, people-to-people exchange, and other fields,” it added.
Poe’s warning
Senator Grace Poe, airing concerns over rushing the “renegotiation of China loan deals,” stressed the Philippine panel should ensure the Filipinos paying for the loans would “not be on the losing end.”
The senator, in a statement over the weekend, viewed President Marcos Jr.’s directive “presents an auspicious opportunity to go back to the drawing board and craft deals that are fair and will produce tangible benefits to the Filipino people.”
She said that “renegotiation should iron out issues that saddled the previous agreements, including interest rates and payment terms.”
At the same time, Poe pointed out that the need to boost the Philippines’s infrastructure “should not compromise the best interest of our country.”
“It is the Filipino people who will ultimately repay such loans and we must ensure that they are not on the losing end,” the Senator reminded the country’s negotiators.