The Government of the People’s Republic of China will finance the construction of a P19.32 billion two-way, four-lane bridge connecting Davao City and the Island Garden City of Samal in Mindanao, the Department of Finance (DOF) announced.
In a statement on Tuesday, June 14, the DOF said the Philippine government sealed a RMB 2.34-billion loan, the first renminbi-denominated financing secured from China under the Duterte administration.
In Philippine peso, the loan is about P17.39 billion. This concessional loan will cover 90 percent of the financing requirements of the Samal Island-Davao City Connector (SIDC) project’s design-and-build contract worth P19.32 billion, the DOF said.
Finance Secretary Carlos G. Dominguez III and Chinese Ambassador to the Philippines Huang Xilian last June 13 exchanged the loan documents for the SIDC project.
The agreements for the RMB 2.34 billion loan were signed last May 31. The ceremonial exchange coincides with the celebration of the 47th anniversary of Philippine-China diplomatic relations and the 21st commemoration of the Filipino-Chinese Friendship Day.
The Department of Public Works and Highways, the main implementor of the project, entered into an agreement with the China Road and Bridge Corp. for the construction of the 3.86 kilometer SIDC bridge,
Once completed, SIDC will significantly cut travel time between Davao City and Samal Island, and reduce the dependency on ferry services.
With an interest rate of two percent per annum, the loan is payable in 20 years, inclusive of a seven-year grace period.
After the signing of the loan accord for the SIDC project, China’s total financing commitments to the Philippines now amount to $1.1 billion, which also includes the loans such as for the Chico River Pump Irrigation Project, and the New Centennial Water Source-Kaliwa Dam Project.
“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,” DOF said.
These plans all aim to facilitate commerce and trade, generate jobs, create wealth among the local government units (LGUs) in Mindanao, and share the benefits of its growth to more remote municipalities, including Samal Island, DOF said.
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.