china philippines

The Chinese Embassy in the Philippines said in a statement on Sunday that China is open for discussions with the Philippines on railway cooperation, following media reports that the Philippines wants to renegotiate loans on China-backed rail projects.

China and the Philippines have maintained consultations on China-Philippines cooperation in infrastructure, including railways and bridges and have made positive progress, the Chinese Embassy said in the statement on its official WeChat account.

China is open to cooperation on railways and other infrastructure projects, and is ready to continue discussions with the Philippines, the statement.

Reuters reported on Saturday that Philippine President Ferdinand Marcos Jr. ordered the country's transport ministry to renegotiate loan agreements struck by his predecessor with China on railway projects worth $4.90 billion.

Transportation Undersecretary Cesar Chavez said the official development assistance loan agreements for the three rail projects were considered "withdrawn" after the Chinese government "failed to act on the funding requests" made by the government of former President Rodrigo Duterte, according to Reuters.

The Philippines's decision is purely driven by economic and commercial considerations and it bears no implication for bilateral relations, which has been heading toward a positive trajectory, Liu Xiaoxue, an associate research fellow at the National Institute of International Strategy of the Chinese Academy of Social Sciences, told the Global Times on Sunday.

"China's bilateral loans to developing countries are usually 'preferential,' meaning that the interest rates of the loans are quite low compared with that of commercial lending," Liu said. 

Chavez said other funding options including tapping private capital through a public private partnership, were also being considered for the rail projects, which include the Subic-Clark Railway Project, the Philippine National Railways South Long-Haul Project and the Davao-Digos segment of the Mindanao Railway Project.

"Amid global economic slowdown, a number of emerging economies have encountered debt problems, and as a result, some have to review and slow infrastructure projects investment - which generate revenues in the longer term," Liu said. "It is reasonable. Once the situation improves, those projects will be resumed. So the concerned parties shall keep an open mind on such issues," Liu said. 

China is the Philippines' largest trading partner and an important development partner. The two sides have conducted fruitful cooperation in various fields with China playing an important role in improving Philippines' infrastructure, said Philippine President Marcos while meeting with Chinese State Councilor and Foreign Minister Wang Yi on July 6.

The Philippines hopes to continuously advance bilateral cooperation in a wide range of areas including politics, economy, education and culture and enrich the strategic partnership, Marcos said.

Wang Yi said China is ready to carry out cooperation with the Philippines in the four key areas of agriculture, infrastructure, energy and culture, so as to help the Philippines speed up its development and rejuvenation and deliver more benefits to its people.