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The Philippines
This Week in AsiaEconomics

Philippines considers pivot to Japan to help finance railway projects, after funding shortfall stalls China deals

  • The new Marcos administration is trying to finance three rail projects after Beijing turned down the previous government’s request for funding
  • In 2012, another China-backed railway plan, the Northrail project was dropped after former president Benigno Aquino said the initiative was overpriced

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The Philippines is considering partnering with Japan to revive three rail projects after Beijing turned down an earlier request for funding. Photo: Shutterstock/File
SCMP’s Asia desk
The Philippines on Monday said it is considering partnering with Japan to revive major railway projects in the country after three China-backed deals hit a wall due to lack of financing.
Transportation Secretary Jaime Bautista said the government held talks last week with officials from the Japan International Cooperation Agency (JICA) and proposed the idea of having them fund the projects signed by then-president Rodrigo Duterte’s administration.
“Actually, we are not limiting our options to China. We can also consider working with Japan and JICA,” Bautista was quoted as saying by broadcaster ANC.

“We want to have different options. We want to see to it that these options are available and it will really fast track the construction and implementation of these projects.”

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The Department of Transportation in July said Beijing turned down the previous government’s request for funding for the Philippine National Railway Bicol line, Subic-Clark railway and Mindanao railway projects, prompting both sides to go back to the negotiating table.

Bautista last week restarted discussions on the stalled projects with Chinese envoy Huang Xilian, who pledged to give Manila a “good deal” after the government believed Beijing’s 3 per cent interest rate was expensive as Japan offered 0.01 per cent.

Philippine Transportation Secretary Jaime Bautista (left) with Chinese envoy Huang Xilian at the Chinese embassy in Makati City, Manila. Photo: Facebook/Department of Transportation
Philippine Transportation Secretary Jaime Bautista (left) with Chinese envoy Huang Xilian at the Chinese embassy in Makati City, Manila. Photo: Facebook/Department of Transportation
The transportation secretary also said the railroad facilities may not be fully completed under the term of President Ferdinand Marcos Jnr, who took office in June.
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