The Philippines and China have signed a 10-year cooperation program on infrastructure that will be in force even after President Rodrigo Duterte’s term expires in 2022.
Malacañang released the agreement on infrastructure cooperation on Tuesday, and it was among the 29 deals that Manila and Beijing exchanged during the two-day state visit of Chinese President Xi Jinping last week.
“The said collaboration will further improve the investment environment and facilitate the stable and orderly cooperation and optimize social and economic development of both countries,” the MOU says.
According to the deal, the agreement will use both countries’ comparative advantages, collaborate in multiple ways, enrich the substance of cooperation and improve the quality of such cooperation.
The deal also says the two countries “recognize the growing demand of the Philippines for infrastructure brought by rapid economic growth, rapid population growth and urbanization.”
“China is willing to share with the Philippines its experience and resources in investment in financing, consultation and design, engineering technology, contracting construction, project management and project financing, among others,” the document says.
Manila and Beijing have considered six fields as the main cooperation areas in the cooperation such as transportation, agriculture, power, watershed management and ICT/telecommunications.
Noting that China has a rich experience in railway infrastructure construction and lead in high-speed railway technology, both sides have agreed to participate in the priorities under the railway cooperation.
“[There will be] construction of the Philippine National Railways South Long Haul Project, Subic-Clark Railway Project, Mindanao Railway Project, and other railway projects,” the MOU says.
There will be road development projects and five constructions of five bridges in the country.
The two sides also seek to explore possible cooperation on the revival of the Pasig River Ferry System and the development projects of some 85 national airports in the Philippines.
Moreover, both sides also agreed to participate in the implementation of irrigation, fish ports, telecommunications cooperation, water management cooperation and power-related projects.
Meanwhile, to improve the financing guarantee system for infrastructure cooperation projects, the Philippines and China have expressed willingness to use concessional loans, export credit and other means of financing to provide financial support for infrastructure projects.
“Both sides underscore the importance of sound financial risk management in ensuring smooth infrastructure cooperation,” the agreement says, stressing that they will encourage their enterprises to use insurances such as export credit insurance to insure enterprises against risks and financial institutions for loan recovery.
The document also says the Philippines will consider extending a sovereign guarantee for the financing of key infrastructure cooperation projects.
The agreement, however, says the expiration or termination of the cooperation program “will not affect the validity of the ongoing cooperation projects.”
Moreover, one of the notable memorandums signed was the MOU on Beijing’s global infrastructure plan called the Belt and Road Initiative.
The two will also work side by side on sectors such as infrastructure, transportation, telecommunications, energy and “other areas of mutual interest” to carry out China’s ambitious plan aimed at reviving the ancient Silk Road trade routes.