The Philippines is starting to look for other options in financing the revival of PNR Bicol even though China is now open to reducing the interest rate for the project’s loan.
The Department of Transportation , with help from the Department of Finance , is weighing its alternatives on how the Philippine National Railways South Long Haul will be funded in the event that negotiations with China fall apart.
Apart from obtaining official development assistance, the DOTr is assessing the viability of taking on a hybrid mode in financing PNR Bicol. Under this, the government will combine its resources with ODA and private funds in building the project. If terminated, this will send a signal to Beijing that Manila is indeed serious in talking to another financier that can bankroll the project.
Further, China was demanding an interest of three percent on the loans for the railways. Despite the high loan rate, President Marcos directed his economic managers to renegotiate the loan for PNR Bicol in the hope of securing a favorable rate this time. China’s economy is expected to have seen moderate growth in the third quarter, according to an AFP survey ahead of data...