Philippines stopped seeking South Korean funding for bridge project in 2024 — officials
MANILA, Philippines — There was never any active loan agreement from South Korea to fund a multi-billion-peso bridge project in the Philippines, according to two departments, which say the Philippines had only agreed to exploratory talks.
"There is no such loan," Agrarian Reform Secretary Conrado Estrella III told Philstar.com in a phone interview. "We did not approach them. There was no loan agreement proposed in the first place."
The Department of Finance also confirmed that talks between the Philippines and South Korea were terminated by the DAR last year due to disagreements over project scope and technical details.
Statements from the two departments came a day after South Korean President Lee Jae-myung announced that he had ordered proceedings for the supposed loan to stop, following a report that said the project had been revived under pressure from a controversial Korean lawmaker despite being initially rejected over corruption concerns.
The report by South Korean media outlet Hankyoreh 21 said the Philippines' Department of Finance submitted a $439-million loan application to Korea's Economic Development Cooperation Fund in November 2023 for the "PBBM Rural Modular Bridge Project."
The investigative report said that Philippine officials, including "the Secretary of Agrarian Reform and the Vice Minister," visited South Korea in December 2023 to meet with economy and finance ministry officials for the said loan application.
During these meetings, Philippine officials said they wanted Korean companies to participate in the project, according to the Korean report.
The project — which aimed to build 350 steel modular bridges across the Philippines by 2028 — was proposed to have a loan of $439 million from Korea's EDCF, according to the report.
Government documents show the total project cost is P28.24 billion.
Estrella: Meeting was just exploratory
Estrella acknowledged the December 2023 meetings and said they were merely "exploratory talks" where it was the Korean officials who pitched the possible funding support for the project.
"That was only an exploratory talk. And they are the ones offering. Hindi kami," Estrella said. "They were the ones presenting it. And we said, no, it's not one big project. These bridges will be constructed in many areas."
Estrella said the meetings were arranged through his undersecretary and that he wasn't genuinely interested in the proposal of the South Korean officials that he met. He did not name the officials who invited him.
The DAR chief said that the funding structure offered by the South Korean officials was a “tied-up loan” and that the procurement for the project would be handled entirely by Seoul.
This, Estrella said, would not have worked with the arrangement they had in mind for the PBBM Bridge Project.
"They cannot fund us because ours is a different category," Estrella said.
"What they want is one big project to fund it. For us, of course, it's for the agrarian reform communities. So kalat yan at maliliit... So there's no such thing," he said.
Estrella argued that any risk of corruption would not come from the Philippine side since the loan terms placed control of procurement entirely with South Korea.
“Aside from that, it cannot be corruption on our side of the fence. Maybe in their side of the fence because it is a tied-down loan. And all the procurement will be done by them, not us,” he said.
According to the investigative report, the South Korean government's initial rejection of the loan was driven by concerns about an unnamed Philippine company participating as a consultant in the project, which reportedly had a history of poor construction and corruption in similar bridge projects.
DOF also denies
The Department of Finance also moved to clarify the project’s funding status on Wednesday, saying there is no P28 billion official development assistance loan between South Korea and the Philippines.
"With regard to the supposed P28 billion official development assistance (ODA) loan between South Korea and the Philippines, the Department of Finance categorically clarifies that no such loan exists," it said.
In its statement, the DOF said the bridge project is now being proposed for financing by the French government, not South Korea.
The department explained that the Philippines typically explores several funding options with different development partners. While the bridge project was initially considered for Korean financing, the DAR halted talks last year “due to non-alignment on scope and other key technical specifications.”
"The government, as early as the last quarter of 2024, decided to look for other bilateral partners who can implement the full scope of the project. Hence, there is no existing loan for the said project with South Korea," it said.
The DOF added that the government began searching for other partners by late 2024 and is now in “advanced negotiations with the French Government to finalize the project’s technical and financial terms.”
Estrella: 'I was not even interested'
Estrella said he only agreed to meet with the Korean officials out of "courtesy."
"Because we were not interested. I said, if you could help us, but I guess you're not in a position to help us," the DAR secretary said.
Estrella also described the Korean side as "confusing," saying there were "several factions who were trying to approach us."
When asked about the feasibility study that was re-commissioned in 2024, Estrella said it was not at the Philippines' request.
"It is not what we want. It's as simple as that," Estrella said. "It has to be... Both parties should be agreeing. Eh una pa lang, 'di na ako nag aagree." — With reports by Jean Mangaluz
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