RP presents China with $32-B funding ‘wish list’

The Philippines has presented China with a $32-billion "wish list" of various projects for possible funding including an ambitious $10-billion interconnection of the North and South Luzon Expressways, the second phase of the South Railway System and at least $1 billion worth of tourism facilities.

Visiting Chinese Trade Minister Bo Xilai, at a press conference, confirmed China’s commitment to provide the $900 million in funding for the long-delayed North Rail project but could only assure a careful consideration and evaluation of the various projects presented to him by the Philippines during the opening yesterday of the two-day China-Philippines Economic Partnership Forum at the Manila Hotel.

Bo, Trade Secretary Peter Favila and Economic Planning Secretary Romulo Neri signed a memorandum of understanding (MOU) that sets the framework for enhanced economic cooperation between China and the Philippines in the areas of agriculture and fishery, housing and construction, public works and infrastructure, tourism, mining, energy and power, industrial parks and economic zones, rehabilitation of textile mills and garments, container inspection and information and communications technology-based education.

According to Bo, additional investments by China in the projects presented by the Philippines would depend on three factors — demand for the investments, capability of Chinese companies to invest and the relationship between the Philippines and China.

Bo said that while China is interested in investing in the Philippines, such investments also depend on careful "scientific" study and evaluation of the proposed projects, risks, profitability and rate of success, among other things.

Earlier, Speaker Jose de Venecia said China had agreed to provide $200 million in funding for the South Rail project as well as for tourism facilities to be presented by various local government units (LGUs).

During his address at the forum, De Venecia said China would help fund the construction of 30 to 40 tourism facilities including seaports and airports.

Likewise, China would also fund the construction of some 100,000 classrooms.

Federation of Filipino-Chinese Chamber of Commerce and Industry (FFCCI) president Francis Chua, who took part in the bilateral discussion, said China had expressed interest in helping fund the South Rail project, the North Luzon Expressway (NLEX) and South Luzon Expressway (SLEX) interconnection through an elevated expressway, as well as various tourism facilities.

Chua confirmed that some $32 billion in projects were presented to Minster Bo Xilai and that after the discussion, China appeared amenable to providing funding of up to $5 billion for the projects.

However, technical members of the Philippine panel were more cautious about quoting a specific figure for Chinese investment.

Chua admitted that Minister Bo did express his concern about continued delays in the implementation of the North Rail project.

Favila, during the joint press conference with Bo assured that the alleged controversy over the Senate investigation of the North Rail was just part of congressional checks and balances and that the Senate had been briefed on the alleged irregularities and would allow the project to proceed.

Both Favila and Bo expressed satisfaction with the signing of the MOU for long-term economic cooperation between the two countries.

Meanwhile, the Chinese government urged the Philippines to immediately start the North Rail Transit project and rush its completion before discussing any possible funding for South Rail.

Favila said Bo informed Mrs. Arroyo and other Philippine officials that the China National Machinery and Equipment Group, the main contractor for the North Rail project, agreed to begin the civil works for the project as the government had relocated most of the informal settlers from the site of the railway.

"They want us to rush it. The suggested deadline of the Chinese government is in two year’s time, let’s finish it," Favila told reporters after the President met with the Chinese minister.

Favila said that, though Beijing may not necessarily wait for the two-year completion of the North Rail project before deciding whether it would fund the southern counterpart, the developments of the construction would certainly matter and be closely monitored by the Chinese government.

"Quite interestingly, the primary (Chinese) contractor had to proceed with the construction itself pending even our engagement of the consultants. That is one of their conditions in all these agreements," Favila said.

"They have trust and confidence in the ability of the Philippine government and the North Rail to carry out this project that they went that far to tell us, ‘All right we will proceed while we are waiting for some of the requirements.’ I think that’s very good and that is the result of the visit of the minister," Favila said.

Favila added the Chinese officials also understood the difficulties faced by the Philippine government in relocating the squatters on the project site as well as the coming rainy season.

"We told them this is the largest relocation in Philippine history and Vice President Noli de Castro, who is in charge of this, has also given them assurances that we are on schedule as far as the relocation is concerned," he said.

"The Chinese minister said they would prefer that the civil works and the construction be done much faster," Favila noted.

Favila said the Chinese contractor has begun to hire some of the displaced informal settlers to do the civil work in Caloocan City.

"Within this month, we are going to fast-track the civil works," Favila said.

Favila said the President asked him to be on top of the situation  and "see to it that we are able to meet the suggested deadline by the Chinese government."

Meanwhile, Neri said that, while the cooperation pact will cover various areas, the agreement was not a framework for a free trade agreement: "Let’s not talk about free trade."

The two sides will establish a functional working mechanism under the Joint Trade Committee and make mutually acceptable financing arrangements to substantiate the accord.

"The two sides agreed to start immediately consultations on the text of the framework agreement at the working level with a view to finding common ground at an early date," the MOU read.

They said a framework agreement would be signed before yearend and after completing the two countries’ domestic legal procedures.

In view of the expansion of the bilateral trade and economic cooperation, the two sides agreed to rename the China-Philippines Joint Trade Committee as the China-Philippines Joint Economic and Trade Commission, which will be confirmed in the framework agreement.

"The agreement will be mutually beneficial. Their only concern is to make things faster and the President assured them that many of the red tape was being eradicated," Neri said.

The matter of mass housing was discussed extensively, as the Philippines proposed that China invest in the construction of low-cost housing for poor Filipinos.

"We asked them to consider our proposal with a timeline of three to five years, during which we should be able to put up to four million houses we need all over the country," Favila said.

"We can start with a million within this year and next year. He (Bo)  had with him all these businessmen from the housing sector (in China), both from the government and the private sector," Favila said.

Favila said they got a favorable response from Bo, as the Chinese minister has had experience in mass housing during his previous post as a local official in China.

Favila said the possible beneficiaries of the mass housing projects could include not only those displaced by the North Rail project, but other informal settlers as well.

The President assured the Chinese delegation that the government would accelerate the review of its regulatory policies to further cut down on the bureaucracy.

In her speech, the President told the Chinese officials and businessmen that her government wanted greater investment in modern infrastructure like roads, ports, airports and expressways so that travel would be much faster in key economic hubs to attract more investors.

The President said the Chinese could invest in agriculture as the Philippines planned to develop two million new hectares of land for agribusiness.

"We hope that the business investments, the companies from China will invest in tourism facilities and projects that provide access like roads and airports," the President said.

"Then there is mining. We have a reserve worth a trillion dollars. We are among the largest reserves in gold, in copper and in nickel," she said.

The President said the Chinese could also invest in the Filipino people, who are known for their world-class skills in 140 countries.

"With your participation in these Philippine investment areas and other investments where you may wish to do your business supported by the skilled Filipino worker, I am very sure we should be able to drive an even more mutually rewarding relationship between our two nations in this golden age of friendship between China and the Philippines."