Philippines looking at Japan, India for railway funding deals

MANILA: The Philippines is looking at Japan and India for alternative financing deals after dropping Chinese loans as funding source for three railway projects valued at more than US$5 billion, according to Finance Secretary Benjamin Diokno (pic).

Diokno said he expects negotiations for the new financing deals to conclude by the first quarter. Partnering with multilateral lenders is also an option, he said.

"It could be a combination of Japan and ADB. We’re exploring all sorts of financing,” he said, referring to the Asian Development Bank.

Manila has said it will no longer pursue Chinese financing for the first phase of the 100-kmSMindanao Railway Project as well as for Subic-Clark freight railway, which links two former US military bases turned commercial zones, and a proposed long-haul commuter railway in the southern part of the main Luzon Island.

Asked if the stalled projects could also be funded through the Maharlika Investment Fund, the country’s first sovereign wealth fund that is currently being set up, the finance chief said it’s possible but the government would only fund a minority share.

On Monday, the government listed its $1.26 billion retail dollar bond on the nation’s bond exchange. The proceeds from the bonds sold last month "will help finance the government’s priority infrastructure flagship projects aimed at driving long-term economic growth,” Diokno said.