Nearly two years after China withdrew its funding for the Mindanao Railway Project (MRP) due to territorial disputes, India has stepped forward to negotiate a deal with the Philippine government for the project’s implementation.

“For the Mindanao Railway Project, discussions are ongoing for foreign-assisted projects. India, for instance, is also interested,” Finance Undersecretary Joven Balbosa told senators during the Development Budget Coordination Committee (DBCC) briefing at the Senate finance committee on Monday, Sept. 1.

Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan told senators on Tuesday, Sept. 2, that the feasibility study (FS) for the MRP is ongoing.

Balisacan also said that another railway project whose FS was supposed to be funded by China, the Philippine National Railways (PNR) South Long-Haul, has been “opened up for other players,” such as France, India, and Japan.

The DEPDev chief said these potential alternative lenders for the South Long-Haul Project will also need to come up with their own FS aligned with their railway technologies.

Balbosa, who heads the Department of Finance’s (DOF) international finance group, noted that in the transport sector in general, several bilateral deals are being discussed aside from the MRP.

Among the interested lenders is Sweden. Balbosa said while big-ticket transport projects receive zero allocation, they continue to attract official development assistance (ODA) partners. “In the ODA discussions, it’s ongoing. We’re not stopping.”

Recent reports indicate that the MRP was scheduled to break ground before the pandemic in 2019, but Beijing reportedly withdrew its interest in funding the 103-kilometer (km) Tagum-Davao-Digos railway as tensions with Manila over the West Philippine Sea (WPS) escalated.

Before the cancellation of Chinese assistance, critics had already raised concerns about the high interest rates attached to Chinese ODA loans, as well as the strings that could pose risks to the country in the long run.

If the project had been implemented as planned, it would now be transporting over 134,000 passengers daily, reducing the travel time between Tagum and Digos to just one hour, down from the current three hours.

Meanwhile, Budget Secretary Amenah F. Pangandaman said the government could tap unprogrammed appropriations (UAs) should foreign-assisted projects require additional funding.

“In the National Expenditure Program (NEP), there’s a provision under the UAs for foreign-assisted projects; assuming the necessity arises, we can get funding from there,” Pangandaman told senators.

Based on 2026 budget documents, the proposed ₱6.793-trillion national budget allocates ₱283.3 billion for foreign-assisted projects, including more than ₱82 billion in government counterpart funds to support ₱201.3 billion in loan proceeds.

This is over four times larger than this year’s ₱66 billion allocation, comprising ₱30.7 billion in government funds and ₱35.3 billion in loans.

UAs in the 2026 budget proposal decreased to ₱249.9 billion, down from ₱363.4 billion in 2025 and ₱531.4 billion in 2024.

Since UAs are not covered by regular budget financing, these can only be funded by excess or new tax and non-tax revenues, as well as foreign loans for specific projects and programs.

To note, a number of foreign-funded projects had been delayed by their inclusion in the national budget’s UAs.