THE PHILIPPINE government is considering official development assistance (ODA) from Japan, South Korea, and India to fund three major railway projects after it dropped China as funding source. 

“There are three projects to be funded by China — Bicol’s South Long-Haul, Mindanao Railway, and Subic-Clark Railway. Maybe this year the contract will be fully terminated. If it will not be funded by China, it will be funded by another ODA,” Transportation Secretary Jaime J. Bautista told reporters on the sidelines of a forum organized by the Economic Journalists Association of the Philippines on Monday.

Last month, Mr. Bautista said that the Philippines is withdrawing its request for ODA from China for three railway projects, citing “lack of progress” on financing.

“[We are] working with other countries. We are exploring this, but we cannot give details yet. The alternative funding may come from ODA — South Korea, Japan, and India,” he said.

Aside from ODA, the Philippines may also seek funding from the World Bank, Asian Development Bank (ADB) and the Japan International Cooperation Agency, Mr. Bautista said.

Finance Secretary Benjamin E. Diokno said funding for phase 1 of the Mindanao railway project could be finalized by the first quarter of 2024.

“It could be official development assistance, (like from) Japan. India has also shown interest… We are looking now. It could be a combination of Japan and the ADB,” Mr. Diokno told reporters at a separate event.

The Finance chief said the government will still pursue the Mindanao Railway project since feasibility studies have already been completed.

Phase 1 of the Mindanao railway project, estimated to cost P83 billion, would stretch from Tagum in Davao del Norte to Digos City in Davao del Sur. It is expected to accommodate 122,000 passengers per day and cut travel time between Tagum and Digos from three hours to one.

Asked if the Mindanao railway can be financed through the Maharlika Investment Fund (MIF), Mr. Diokno said this was a possibility, but it would not be fully financed by the sovereign wealth fund.

Aside from the Mindanao railway, the government has also pulled its request for ODA from China to fund the P50-billion Subic-Clark railway and the Philippine National Railway’s P142-billion South Long Haul railway.

“The negotiations have been slow. It’s not moving, so we have to explore other sources,” Mr. Diokno said.

President Ferdinand R. Marcos, Jr. last year ordered Transport officials to renegotiate loan deals with China that began during the Duterte administration in 2018. However, these loan agreements were “withdrawn” after China did not act on the funding request.

Despite the delays in funding, Mr. Bautista said they still expect to complete these railway projects by the end of 2028.

“We need to get the funding first; funding is one of the challenges because we already have the design. Due to the delays, we may need to get approval for the change of cost because maybe it will be higher, we’ll study that. We are working on it,” he said. — Ashley Erika O. Jose and Luisa Maria Jacinta C. Jocson