China to PHL: Remove hurdles to infrastructure projects

The Philippine government must address “challenging issues” to ensure that projects funded by concessional loans from China would proceed according to schedule, Chinese Ambassador to the Philippines Zhao Jianhua said.

Zhao, speaking on the sidelines of the 68th founding anniversary celebration of the People’s Republic of China in a Makati City hotel, said the Chinese government has so far
provided $5 billion in concessional loans to finance three projects in the Philippines.

He said more concessional loans would be extended by Beijing to finance President Duterte’s various infrastructure projects.

He also added some of the projects have already been bidded out in China and would be undertaken by Chinese companies.

“The Chinese have accumulated relative advantages over almost all other countries in building infrastructure in an efficient manner”, Zhao said.

But he added Chinese companies have encountered problems building infrastructure in the Philippines. “As the saying goes, it takes two to tango. You have your responsibilities too, you have to create the necessary conditions and atmosphere for the infrastructure to be built and to be operational”, Zhao said.

He added it is Beijing’s policy to support Chinese banks and Chinese enterprise, to finance infrastructure projects in accordance with legal and relevant procedures in the Philippines.

But Zhao said “challenging issues” have to be addressed by the Philippine government “in an efficient manner and with a strong sense of urgency”.

“Your right-of-way issue; if you cannot clear the ground for the railway or the road, we might be stuck there forever,” he added.

“According to your local law, you require that 70 percent of a firm’s work force would consist of Filipinos when a foreign-funded project is to be implemented in the Philippines,” Zhao said.

He said Chinese firms would be “very happy” to tap Filipinos for their projects if the Philippines has qualified laborers because it is cheaper than bringing in workers and technicians from China.

“But the problem you have is: do you have enough qualified laborers? What if you do not have them?”  Zhao asked.

Asked what he meant by “qualified” laborer, Zhao explained: “For each projects, they [Chinese contractors] all require technicians, qualified laborers and common laborers.”

He said even laborers need to have certain standards. “First and foremost, you must be healthy enough to work, and second you have to be hardworking, and third you must have the skills required before you go to work.”

Zhao added laborers must also be healthy and strong and must be able to learn additional skills while on the job. “But if you have people not strong enough to work, who are not willing to work or who would not learn during their work, what can you do?”

So far, the Chinese envoy said Beijing has committed to build the Kaliwa Dam, the Chico River Irrigation Project and the North-South Railway for a total of $5 billion.

Zhao added Chinese financiers would also build two rehabilitation centers in Mindanao for free. “Meaning you don’t have to pay, we pay for it and also the two bridges across the Pasig, you don’t have to pay for it.”

“We will pay, finance and undertake the constructions, and, most likely, there would be groundbreakings in November, probably by our Prime Minister,” he said.

However, Zhao added the ground-breaking would be ceremonial because Pasig would be too far Prime Minister Li Keqiang to attend. Following Duterte’s state visit to China last year, he said he was able to bring home $24 billion worth of funding and investment pledges, as Manila and Beijing have agreed to resume talks and explore areas of cooperation in the South China Sea.

China will provide $9 billion in soft loans, including a $3-billion credit line with the Bank of China, while economic deals, including investments, would yield $15 billion, Trade Secretary Ramon M. Lopez told reporters in Beijing.

Preliminary agreements in railways, ports, energy and mining worth $11.2 billion were also signed between Philippine and Chinese firms.