Renegotiating Chinese Loans Should Solve Interest Rate, Payment Terms Issues │ GMA News Online

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After three major rail projects were stalled due to Chinese funding concerns, a lawmaker said over the weekend that loan renegotiations should focus on interest rates and payment terms.

According to the chair of the Senate Public Services Committee, Senator Grace Poe, renegotiating the agreements with China could ensure that the agreements are beneficial for the country.

“The President’s directive presents an auspicious opportunity to return to the drawing board and reach agreements that are fair and that will produce tangible benefits for the Filipino people,” Poe said in an emailed statement.

“The renegotiation is expected to iron out issues that plagued previous deals, including interest rates and payment terms.”

It comes as President Ferdinand “Bongbong” Marcos Jr. last week ordered the Department of Transportation (DOTr) to renegotiate loan agreements for three railroad projects.

The projects include the Subic-Clark Railway Project, the South Long-Haul Project of the Philippine National Railways (PNR) and the Davao-Digos Section of the Mindanao Railway Project (MRP) which have been under -treaties to Chinese companies.

Undersecretary of Transportation for the Railways, Cesar Chavez, said the three rail projects were considered “withdrawn” after the Chinese government failed to respond to requests for funding from the administration. former President Rodrigo Duterte.

Chavez said negotiations for the projects began in 2018, with loan applications valid until May 31, 2022, but would be automatically withdrawn if not approved by then.

Then-Finance Secretary Carlos Dominguez III, however, decided to cancel loan requests with China due to the government transition and out of respect for the new administration.

The contract for the PNR 142 billion PNR South Long-Haul project has been awarded to China Railway Group Ltd.’s joint venture, China Railway No. 3 Engineering Group Co. Ltd. and China Railway Engineering Consulting Group Co. Ltd. in January .

The contract for the 51 billion peso Subic-Clark railway project was also awarded to China Harbor Engineering Co. in December 2020.

The Department of Transport (DOTr) said earlier that the 83 billion peso Tagum-Davao-Digos segment of the MRP could not proceed after China was ‘unable’ to submit a shortlist of contractors . — DVM, GMA News

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