The Philippines is looking to diversify its infrastructure funding through allies such as the US and Japan after what analysts say is a withdrawal of several China-backed projects in the Southeast Asian country over geopolitical reasons.
On July 26, the Philippine transport department said funding for a feasibility study on the Subic-Clark-Manila-Batangas railway was in the works. The railway project is a joint initiative by the Philippines, Japan, the United States, Sweden and the Asian Development Bank.
The 250km project is part of the proposed Luzon Economic Corridor, announced during the trilateral leaders’ summit in April attended by Philippine President Ferdinand Marcos Jnr, US President Joe Biden and Japan Prime Minister Fumio Kishida.
Once completed, the project will run along and connect four cities on Luzon island, linking three main ports and two international airports.
The Subic-Clark-Manila-Batangas railway project is an updated initiative of the original Subic-Clark railway project that was initially backed by Chinese investments.
Nikkei Asia reported on Monday that officials from the Philippines’ Bases Conversion and Development Authority, the agency overseeing redevelopment projects in former US military bases such as Subic and Clark, were in Tokyo earlier in July to seek funds for the latest railway project, as well as other developments in the former bases.
The Philippines backed out of China’s Belt and Road Initiative in October after Beijing became unresponsive to its funding requests for three railway projects. As a result, the projects under the initiative have been dropped.
China had initially pledged nearly US$5 billion of funding to build three railway lines in the country including the Subic-Clark railway project, the South Long Haul railway project in Luzon and the Mindanao railway project in southern Philippines.
The first phase of the Mindanao railway project, which costs 83 billion Philippine pesos (US$1.4 billion), was supposed to be set for construction in January 2019. Last year, the Philippines’ finance department wrote to the Chinese embassy and said Manila was “no longer inclined to pursue the Chinese ODA [official development assistance] financing for the Mindanao railway project.”
The Philippines backed out of China’s Belt and Road Initiative in October after Beijing became unresponsive to its funding requests for three railway projects. As a result, the projects under the initiative have been dropped.
China had initially pledged nearly US$5 billion of funding to build three railway lines in the country including the Subic-Clark railway project, the South Long Haul railway project in Luzon and the Mindanao railway project in southern Philippines.
The first phase of the Mindanao railway project, which costs 83 billion Philippine pesos (US$1.4 billion), was supposed to be set for construction in January 2019. Last year, the Philippines’ finance department wrote to the Chinese embassy and said Manila was “no longer inclined to pursue the Chinese ODA [official development assistance] financing for the Mindanao railway project.”
This followed comments from a senior Chinese economic official, who cited “geopolitical factors” for hindering funding of the Philippine projects.
Chester Cabalza, president of the International Development and Security Cooperation think tank, told This Week in Asia that China had “obviously backed out from the railway deal under the Belt and Road Initiative with the Philippines to isolate and punish the Marcos administration’s diplomatic and strategic rapprochement with the US”.
Although Chinese officials did not mention maritime disputes as a reason for the stalling in funding, Manila and Beijing have been at odds over the South China Sea for years, which intensified after former president Rodrigo Duterte, who was known for his pro-Beijing policies, left office in 2022.
