China, Philippines relaunch investment talks to reverse shortfall in Beijing’s pledged funding

China hopes to maintain friendly relations with the Philippines, a historical US ally, by revisiting loan agreements for three major railway projects, according to analysts

Incidents in the South China Sea over the past four years have eroded Sino-Philippine ties, but Beijing recently said that it is ready for a ‘golden era’ in bilateral relations

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Chinese Foreign Minister Wang Yi met with Philippine President Ferdinand Marcos Jnr in Manila on July 6. Photo: Xinhua

Published: 6:00am, 3 Aug 2022

China has relaunched talks with the Philippines on funding billions of US dollars worth of infrastructure in the relatively impoverished Southeast Asian country, after its president called out Beijing for falling short of old pledges.

Chinese institutions pledged a combined US$24 billion in loans and investment in 2016, when former Philippine president Rodrigo Duterte visited Beijing to improve political relations.

The Philippines had won a case against China in the Permanent Court of Arbitration in The Hague that year over competing sovereignty claims in the South China Sea. Beijing rejected the tribunal’s decision but welcomed Duterte’s overture.

As of 2020, the net loan commitment by China had reached US$493.1 million, according to the National Economic and Development Authority in the Philippines. And China’s total approved investments from 2017 to 2021 were worth US$3.2 billion, Philippines Statistics Authority data shows.

Loan agreements for three landmark Philippine railway projects are effectively “withdrawn” because the Chinese government “failed to act on the funding requests”, the government-run Philippine News Agency reported on Friday.

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