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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