Philippines looks beyond China to fund massive infrastructure needs
Manila welcomes financing from Beijing but will ‘look for the best deal’
The Philippines will look beyond China to fund a massive infrastructure programme that Manila hopes will go a long way to advancing its economy, according to senior Philippine officials.
On the sidelines of the belt and road forum in Beijing on Monday, Philippine Finance Secretary Carlos Dominguez said China had committed around US$9 billion to projects in the Philippines that would start soon. But that was well short of the US$167 billion needed for the building programme.
Dominguez said drawing on other sources of funding would make Manila less dependent on Beijing. “The Philippines is going to fund the projects in our own way. We welcome help from China, but that is not the main source of the funding,” he said.
Benjamin Diokno, secretary of the Philippine Department of Budget and Management, said the Philippines also had offers of financing from Japan and South Korea.
“As a matter of policy, we look for the best deal,” Diokno said.
“Whatever is favourable for us, we will get them. We do not stick to one country. We are not totally dependent on China for development, but we welcome any help.”
Ties between Beijing and Manila have improved since Philippine President Rodrigo Duterte visited the Chinese capital in October. Back then, China pledged – on paper – US$15 billion in investment in the Philippines for projects, including two railways, a hydroelectric dam and an irrigation system.
But that commitment is still just a fraction of actual needs.
The funding for the Philippines reflects the broader financing problems facing the “Belt and Road Initiative”
On Sunday, President Xi Jinping said China would plough at least 780 billion yuan (US$113 billion) into projects along the routes.
But Peking University economics professor and former World Bank chief economist Justin Lin said the projects under the initiatives required “billions and even trillions of US dollars of support”. “Even if we combine all the multilateral institutions together, the funding is still not sufficient,” Lin said.
And without enough funds, it would be hard for the projects to succeed.
“The financing is an important issue that needs to be addressed, because the infrastructure projects are long-term, and require huge initial investment. If we can’t have the right organisation, the projects can’t be undertaken,” Lin said.