Loan negotiations between the Philippines and China over the former’s multi-billion-peso infrastructure projects suspended during the later part of the Duterte administration have yet to start.
This was revealed in today’s public hearing by the Senate finance sub-committee ‘’K’’ chaired by Senator Grace Poe on the proposed 2023 P167.12 billion budget of the Department of Transportation (DOTr).
Senator Nancy Binay called out the DOTr for its supposed presumption on the completion of the government's big-ticket railway projects, noting the apparent lack of assurance in funding.
Senators were told that the Philippines has yet to actually secure China's loan commitments for the multi-billion peso projects.
DOTr UndersecretaryTimothy John Batan said negotiations between the Department of Finance and the Chinese government have yet to officially resume, and they expect the loan grant by mid-2023.
Critics have pointed out that China imposes an interest rate on loans from two to three percent.
Japan, on the other hand, has a very interest rate of from 0.25 percent to 0.75 percent.
"With this kind of scenario, isn't it more realistic if we don't announce that the Mindanao Railway would be operational by 2027, when, at the moment, we don't know where we'll get the money to continue this project?" Binay said in a mix of Filipino and English, referring to one of the railway projects supposed to be funded by China.
"Let us manage everybody's expectation," she told the DOTr.
In a related development, Poe noted that despite a "notable" decrease in its appropriation for the aviation, maritime, and road sectors for 2023, the DOTr had a 120.45-percent increase in its proposed allocation, from its 2020 budget of P75.827 billion.
This was the highest increase among all national government agencies, she said.
Transportation Secretary Jaime Bautista said the department originally requested P564 billion for next year.
"Today, we will evaluate this massive increase," Poe said, adding that bulk of the increases were enjoyed by the rail sector.