China asks PH to return $500M loan

Posted at Sep 25 2012 02:50 PM | Updated as of Sep 25 2012 10:50 PM

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MANILA, Philippines - The controversial Northrail project will be reconfigured to make the contract legal.

This was revealed by Department of the Interior and Local Government Secretary Mar Roxas during the press briefing in Malacañang.

The Supreme Court earlier allowed a lower court to hear the case calling for the annulment of the allegedly overpriced Northrail contract. It ruled that the Northrail project is defective since it failed to comply with the Philippine Procurement law.

Roxas revealed that while the territorial row over the Scarborough Shoal was ongoing, the Chinese government suddenly required the Philippine government to return $500 million in official development assistance (ODA) for the Northrail project.

Roxas said the loan will be paid by installment over a period of 2 years.

"We do have the money and Finance Secretary Cesar Purisima said there are negotiations to pay it installments in 2 years," he said.

The Northrail project is supposed to connect Manila to areas in Central and Northern Luzon.

ANC Dateline Philippines, September 25, 2012