Philippines secures P17.39-B loan from China for Samal Island-Davao City Connector project

Less than two weeks before it steps down, the Duterte administration’s Build, Build, Build program secured a new loan from China for the construction of a bridge connecting Davao City and Samal island in Mindanao, the Department of Finance (DOF) announced on Tuesday.

In a statement, the DOF said that on Monday, June 13, the Philippines and China exchanged documents for a RMB2.34-billion or approximately P17.39 billion loan to finance the construction of a two-way, four-lane  bridge connecting Davao City and the Island Garden City of Samal in Mindanao.

Finance Secretary Carlos Dominguez III, on behalf of the Philippine government, and Chinese  Ambassador to the Philippines Huang Xilian, representing the government of the People’s Republic of China, exchanged documents on the framework agreement and the loan agreement for the concessional loan.

The Finance Department noted that the loan for the Samal Island-Davao City Connector (SIDC) project, which is about $362 million, is the first renminbi-denominated loan secured from China under the Duterte administration.

The concessional loan will cover 90% of the financing requirements of the SIDC project’s design-and-build contract worth P19.32 billion.

The RMB2.34-billion loan carries an interest rate of 2% per year, payable in 20 years, inclusive of a seven-year grace period.

The DOF said that the Department of Public Works and Highways (DPWH), the main implementor of the project, entered into an agreement with the China Road and Bridge Corp. for the construction of the 3.86-kilometer SIDC bridge, which, once completed, will cut travel time between Davao City and Samal Island, and reduce the dependency on ferry services.

With the signing of the loan accord for the SIDC project, the Finance Department said China’s total financing commitments to the Philippines now amount to $1.1 billion, which also includes the loans for the Chico River Pump Irrigation Project of the National Irrigation Administration (NIA), the New Centennial Water Source-Kaliwa Dam Project of the Metropolitan Waterworks and Sewerage System (MWSS), and the Project Management Consultancy (PMC) of the Philippine National Railways (PNR) South Long Haul Project of the Department of Transportation (DOTr).

The SIDC project also complements the Mindanao Spatial Strategy/Development Framework 2015-2045, the Davao Regional Development Plan, and the Davao Gulf Area Development Plan 2011-2030, which all aim to facilitate commerce and trade, generate jobs, create wealth among the local government units (LGUs) in Mindanao, and share the benefits of its growth to more remote municipalities, including Samal Island.

The Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area Cooperation (BIMP-EAGA), which intends to promote economic development in underdeveloped and geographically remote regions in its member countries, is also expected to benefit from the SIDC project, according to the DOF.—AOL, GMA News