PH secures P17-B loan from China

THE Philippines secured loan from China worth 2.34 billion renminbi (about P17.39 billion) to fund the construction of a two-way, four-lane bridge connecting Davao City with the Island Garden City of Samal in Mindanao, the Department of Finance (DoF) announced on Tuesday.

In a statement, it said Finance Secretary Carlos Dominguez 3rd, representing the Philippine government, and Chinese Ambassador to the Philippines Huang Xilian, representing China, exchanged documents on the framework agreement and loan agreement for the concessional loan on Monday afternoon at the DoF head office in Manila.

The agency said the financing for the Samal Island-Davao City Connector (SIDC) project is the first renminbi-denominated loan obtained by the Duterte administration.

“This concessional loan will cover 90 percent of the financing requirements of the SIDC project’s design-and-build contract worth P19.32 billion,” it said, adding that the agreements for the 2.34-billion renminbi loan were signed last May 31.

The loan is repayable in 20 years, including a seven-year grace period, at a 2-percent annual interest rate.

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The DoF said the Department of Public Works and Highways, the project’s main implementer, has reached an agreement with China Road and Bridge Corp. for the construction of the 3.86-kilometer SIDC bridge, which will significantly reduce travel time between Davao City and Samal Island and reduce reliance on ferry services once completed.

The SIDC project complements the Mindanao Spatial Strategy/Development Framework 2015-2045, the Davao Regional Development Plan and the Davao Gulf Area Development Plan 2011-2030, all of which aim to facilitate commerce and trade, create jobs, and share the benefits of Mindanao’s growth to more remote municipalities, including Samal Island, it added.

“The Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area Cooperation, which intends to promote economic development in underdeveloped and geographically remote regions in its member countries, is also expected to benefit from the SIDC Project,” the Finance department underscored.

Asean is the 10-member Association of Southeast Asian Nations.

The DoF said China’s total financing commitments to the Philippines now total $1.1 billion, which includes loans for the National Irrigation Administration’s Chico River Pump Irrigation Project, the Metropolitan Waterworks and Sewerage System’s New Centennial Water Source-Kaliwa Dam Project and the Department of Transportation’s Project Management Consultancy of the Philippine National Railways South Long Haul Project.

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