What was China’s plan?

Three big infrastructure projects that former president Rodrigo Duterte proudly announced are at present deemed cancelled.

These are the PNR Bicol Railway Project from Calamba, Laguna to Daraga, Albay, the SubicClark Railway Project (SCRP) and the first phase of the Mindanao Railway Project (MRP). These large projects were part of Duterte's “Build, build, build” program. Chinese banks were supposed to provide the loans. We all know how much Duterte proudly highlights Chinese-funded projects. As we commonly say, anyare?

It turns out the bank that would provide the funds did not act on the loan applications even though contracts were already awarded. So instead of the applications languishing in limbo, they were cancelled, effectively killing the projects.

According to Undersecretary for Railways Cesar Chavez of the Department of Transportation (DOTr),

President Marcos Jr. wants to renegotiate the loans with Beijing. He added Beijing did not approve the Philippine loans as early as last year. Of course, we heard nothing about the matter, lest it embarrasses the past administration. So, what was China's plan all along? Did they just play along with a president wanting so much to be in China’s good graces?

In addition, China has not provided a list of contractors for the projects which was required by the Philippine government. It’s becoming clear China had no intention of pursuing conditions regarding the loans.

You will recall there was concern about these Chinese loans because of the high interest. China demands 3% compared to Japan’s 0.01%. A nobrainer, if you ask me. Japan’s interest rate is much more favorable. I have always considered Japan to be a true friend of the Philippines.

It's a pity these good projects will not push through. The country sorely needs a proper railway system. There will be a significant reduction in travel time for passengers. The economic benefits are also substantial. The Mindanao project will be the first train system on the island.

At present, the government has no funds to continue the projects on its own. I don’t see the wisdom of renegotiating with China after what happened, taking the interest rate into consideration. Is it because Duterte started these and they need to continue because of his legacy? Will Marcos also follow Duterte’s shift to China?

But if China wanted to help, it should have done so while Duterte was still president. They did provide a loan for the construction of a bridge connecting Davao City to Samal Island. Was that more important than these three railway projects?

“If China wanted to help, it should have done so while Duterte was still president.”