Bayanihan Media Awards National Winner

Loan for P51-B Subic-Clark freight railway project ‘withdrawn’

The P51-billion Subic-Clark freight railway project and two other Build, Build, Build projects under the previous administration are now in limbo, following the withdrawal of the Department of Finance’s loan application to the China Eximbank.

Department of Transportation (DOTr) Undersecretary for Rails Cesar Chavez said in a statement that “in June 2022, the DOF advised China Eximbank that the loan applications for these contracts, among other contracts of other Implementing agencies, are deemed automatically withdrawn” after not having been approved as of May 31, 2022.

According to Chavez, former Finance Secretary Sonny Dominguez “cancelled the application instead of keeping it in suspended animation.”

Chavez said that considering the withdrawal of the previous loan applications, the current DOTr leadership immediately wrote and coordinated with DOF to initiate policy discussions on the way forward for the rail projects.

Contracts signed between the Philippines and China in January 2021 state that funding will come from the latter as loans to be negotiated by both governments.

The 71-km Subic-Clark railway will connect the Subic Bay Freeport Zone and Clark International Airport and will link the North Railway Project.

Also unfunded are the P142-bllion Laguna to Bicol (PNR Bicol Package 1) and P83-billion Mindanao Railway projects, according to the DOTr.

The PNR Bicol Package 1, which was supposed to have started in the first quarter of 2022 and expected to be completed by 2024, would go into service by the third quarter of 2025, according to the DOTr.

The P83-billion Mindanao Railway Project was set to begin its Phase 1 construction for the Tagum-Davao-Digos segment in January 2019.

According to Chavez, policy discussion on the way forward for the three China Rail Projects has also been initiated at a July 12 Cabinet Meeting, during which “[President Ferdinand ‘Bongbong’ Marcos Jr.] commented that as a matter of policy, we should encourage more investment in rail and that we should focus more on rail transport.”