TOKYO - Prime Minister Shinzo Abe is looking to offer 5 billion yen ($48.2 million) in loans when he meets with Philippine President Rodrigo Duterte next week, bilateral diplomatic sources said Saturday.
The financial support is aimed at helping facilitate agricultural development in the southern Philippine island of Mindanao, according to the sources. Duterte, who will make his first visit to Japan on Tuesday, was a longtime mayor of Davao on the island.
The deal will come after Duterte's four-day visit to China this week underlined the Philippines' diplomatic shift to move closer to Beijing and away from Washington.
During his stay in China, Duterte announced his "separation from the United States...both in military but economics also."
The Philippines and China agreed Friday to practice self-restraint in the South China Sea and hold regular discussions on a bilateral basis in addressing maritime issues.
The agreement follows a ruling by an international arbitration tribunal in July that Beijing's sweeping claims to historical rights in the resource-rich South China Sea have no legal basis. The Philippines brought the case before Duterte took office in June.
Japan, a close U.S. ally and the Philippines' largest trading partner last year, is seeking to cement relations with the Southeast Asian nation with the agricultural assistance.
But it remains uncertain how effective it will be, as China also intends to provide significant economic cooperation.
Manila is expected to receive a total of $24 billion worth of investments and credit facilities from China, Philippine Trade Secretary Ramon Lopez said Friday in Beijing.
Japan will extend loans to financial institutions in Mindanao to help farmers expand their business and improve productivity.
At the meeting with Duterte, Abe will also vow to strengthen cooperation in building infrastructure in the Philippines and providing patrol ships in a bid to show Tokyo's full support, the sources said.
Abe will reaffirm the importance of respecting the rule of law over the disputes in the South China Sea, they added.
As China has intensified its efforts to build military facilities in the sea, Japan has demanded that Beijing respect the rule of law in settling the disputes with the Philippines and other claimants.