Senators urge other fund sources for train projects
Sen. Grace Poe —SENATE PRIB
Two senators on Thursday called on the government to find alternative funding sources for its ongoing rail projects, which are threatened with delays following China’s withdrawal of its official development assistance (ODA) for the Philippines.
In a statement, Sen. Grace Poe, chair of the Senate committee on public services, said China’s backing out of the railway project “should not derail” the implementation of the country’s infrastructure programs.
“It’s time [for the Philippine government] to explore ODAs from other countries and seek available funding options from multilateral institutions and international assistance agencies that can deliver the goods,” Poe said.
Poe made the statement a day after the Department of Transportation (DOTr) announced that it had dropped Chinese loan financing to bankroll the stalled Mindanao Railway Project (MRP).
Transportation Secretary Jaime Bautista on Wednesday said the DOTr was now “talking to other possible ODA partners for the completion of the MRP.
But Poe played down the value of the Chinese loans to the Philippine government’s projects, with Chinese banks keeping the country’s loan applications in “suspended animation” for years.
“While appearing attractive, the loans are not exactly that benevolent as they come with hefty interest rates and other strings that could be detrimental to the country in the long term,” the senator said.
The government should just then tap the private sector as a partner in “[hastening] the country’s infrastructure development” and “bringing innovative and efficient services,” Poe said.
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For his part, Sen. Sherwin Gatchalian also called for the exploring of other loan sources for the Philippine government’s projects that may be aborted by China’s ODAs.
“Japan, World Bank, (Asian Development Bank)—these multilaterals and these funding institutions have a long history in funding the Philippines and they have successfully funded many projects in our country with concessionary interest rates and concessionary terms,” he said.
“So we have a very good relationship with them … we can increase the amount that we are drawing from these institutions,” Gatchalian added.
He called the scrapping of China’s ODA a “temporary setback,” even as the loans also suffer from issues of feasibility and high interest rates.
