2Q Headline no.

1 :
China loan pledges to Philippines reach $1.1 billion
( Philippines Star, Jun. 15, 2022 )

MANILA, Philippines — China’s loan commitments to the Philippines have reached $1.1
billion, or close to P59 billion, after the Duterte administration received its first-ever financing
in Chinese renminbi.
The Department of Finance (DOF) said yesterday that China’s total financing for the
Philippines stands at $1.1 billion for the completion of multiple public infrastructure across the
country.
The financing includes loans for the Chico River Pump Irrigation Project, the Kaliwa Dam
Project and the Philippine National Railways South Long Haul Project.
On Monday, Finance Secretary Carlos Dominguez also received the official documents for the
Duterte administration’s first-ever loan denominated in renminbi. Totaling 2.34 billion
renminbi, or around $362 million, the financing will be used to build a two-way, four-lane
bridge connecting Davao City with Samal Island.
Dubbed the Samal Island-Davao City Connector (SIDC) Project, the bridge seeks to bring down
travel time between the two locations to five minutes. Once completed, the government projects
that at least 25,000 motorists will use the SIDC every day.
As an infrastructure that will stand above Pakiputan Strait, the SIDC is also expected to reduce
the dependence of locals and travelers on ferry services.
According to the DOF, the renminbi-denominated loan awarded by China will pay for 90
percent of the financing requirements of SIDC’s project cost worth P19.32 billion.
In January, the Department of Public Works and Highways (DPWH), as the lead agency, signed
a design and build contract with state-run China Road and Bridge Corp. (CRBC).
By choosing CRBC as the contractor, the DPWH was allowed to apply for a loan from China to
develop the detailed engineering design of SIDC. Upon completion, only then can CBRC begin
the civil works estimated to last up to 54 months.
The loan for SIDC carried an interest rate of two percent per annum. It is payable within 20
years and has a grace period of seven years.
The DOF explained that the SIDC complements development blueprints, such as the Mindanao
Spatial Strategy/Development Framework 2015-2045, geared toward facilitating trade
activities, generating local wealth and promoting inclusive growth in remote areas in Mindanao.
Also, the DOF said Mindanao’s trade with neighboring countries, especially Brunei
Darussalam, Indonesia and Malaysia, should benefit from the completion of SIDC.
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