Philippines, China set out 10-yr infra cooperation program

Dharel Placido, ABS-CBN News

Posted at Nov 27 2018 12:26 PM

Philippines, China set out 10-yr infra cooperation program 1
Chinese President Xi Jinping and Philippine President Rodrigo Duterte shake hands after the Chinese leader signed the guest book at the Malacañang palace in Manila, Philippines, November 20, 2018. Mark Cristino/Pool via Reuters

MANILA - The Philippines and China have set out a ten-year cooperation program on infrastructure that is hoped to outlive the term of President Rodrigo Duterte, according to a copy of an agreement between the countries released by the Palace on Tuesday.

The agreement on infrastructure cooperation was one of the 29 deals that the two countries signed during the historic state visit of Chinese President Xi Jinping to the Philippines last Nov. 20-21.

The agreement, which has a timeline of Nov. 2018 to Nov. 2028, aims to “strengthen the link between China’s Belt and Road Initiative and the Philippines’ Long Term Vision, put into practice the consensus reached between China and the Philippines on strengthening infrastructure cooperation, and promote further in-depth cooperation.”

It also said the two countries “recognize the growing demand of the Philippines on infrastructure brought by rapid economic growth, rapid population growth, and urbanization.”

“China is willing to share with the Philippines its experience and resources in investment in financing, consultation and design, engineering technology, contracting construction, project management, project financing, among others,” the document reads.

Both sides have set transportation, agriculture, power, watershed management, and ICT/telecommunications as main cooperation areas in the infrastructure cooperation program.

On railways, the Philippines and China agreed to encourage enterprises to participate in the construction of the Philippine National Railways South Long Haul Project, Subic-Clark Railway Project, Mindanao Railway Project, and other railway projects, and conduct feasibility studies for priority railways, such as the subsequent phases of the Mindanao Railway Project and other proposed railway projects.

The two countries also agreed to cooperate on the construction of and conduct of feasibility studies for various roads and bridges around the country. They also seek to explore possible cooperation on the revival of the Pasig River Ferry System.

Both sides also recognized the “huge potential for bilateral cooperation in telecommunications.”


The Philippines and China committed to improve financing guarantee system for infrastructure cooperation projects. They also expressed willingness to utilize concessional loans, export credit, and other means of financing to provide financial support for infrastructure projects.

“Both sides underscore the importance of sound financial risk management in ensuring smooth infrastructure cooperation,” the agreement reads.

“Both sides shall encourage their enterprises to use such insurances such as export credit insurance to insure enterprises against risks and financial institutions for loan recovery.”

The document also states that the Philippines will consider extending sovereign guarantee for financing of key infrastructure cooperation projects, as applicable.

The expiration or termination of the cooperation program “will not affect the validity of the ongoing cooperation projects,” according tot he agreement.


Aside from the cooperation program on infrastructure, the two countries also signed a memorandum of understanding on the Belt and Road Initiative, Beijing’s ambitious global infrastructure plan aimed at reviving the ancient Silk Road trade routes.

The two countries also signed the implementation agreement of the feasibility study for the Davao City Expressway Project, and the program for cooperation on industrial parks development.

The cooperation program on industrial parks shall focus on developing export-oriented processing/manufacturing industrial parks, “which will attract Chinese enterprises to settle and operate.”

The outpouring of Chinese pledges to help boost Philippine infrastructure has been met with skepticism due to the what other countries which accepted Chinese loans suffered.

Tan Qingsheng, Charges d'Affaires at the Chinese Embassy in Manila, however, said Monday the Philippines is in "no danger" of falling into a debt trap with China's assistance in its infrastructure program.

Tan said he "cannot understand the logic" of media reports warning of a debt trap.

"Those projects are proposed by the Philippine side, are economically viable and are positive for the Philippine economy," he said.

There is no "conspiracy to bankrupt host countries and seize assets," said John Gong, an economics professor at the University of International Business and Economics in Beijing.

The Philippines, under President Rodrigo Duterte, is hoping to jointly explore and develop with China portions of the hotly contested South China Sea, believed to be rich in oil and gas.

The Philippines in 2016 defeated China in a United Nations-backed arbitral tribunal, which invalidated Beijing’s economic claim to the strategic sea lane.

Duterte, however, has chosen to set aside the ruling in exchange for better economic ties with Asia’s largest economy.

China has ignored the ruling and insists it has sovereignty over the waters. Duterte, meanwhile, has raised little opposition to China’s continued military activities in the area.

Duterte had said that despite his government’s rapprochement with China, he would never surrender the country’s claims to the sea and would bring up Manila’s arbitration victory against Beijing at the appropriate time.