September 5, 2004
President Gloria Macapagal Arroyo yesterday trumpeted the multimillion dollar loan for the construction of the North Luzon Railways as one of the best deals she brought home from her three-day state visit in the People’s Republic of China.
The President returned to Manila late Friday night from her China visit, reaping close to $1 billion in new investments and loans for major infrastructure, energy and agricultural development.
Mrs. Arroyo reported the gains of her China state visit including the biggest $400-million infrastructure loan facility from the Chinese government during a town hall meeting at the MRT station in Cubao, Quezon City, saying that the loan would be helpful in the decongestion of Metro Manila.
Amid reports the project was high-priced, the Chief Executive said China actually gave the "best price" and a "very generous" financing terms for the construction of Phase 1 of the North Rail project, the 32.2-kilometer line that would run from Caloocan City to Malolos City, Bulacan.
"Our friendship with China is very important. The cost of the North Rail was halved. And the period of payment was extended and the interest was lowered," she said. She surmised that the reports about the North Rail being overpriced may have come from the losing bidder of the project.
She said the Chinese government has approved an initial $100 million release of the $400 million for the Phase 1 of the project, which will begin by November.
She said the North Rail project would decongest Metro Manila and make Clark and Subic the best transportation and service hubs in Southeast Asia.
She noted that the agreement has saved the Philippine government as much as $500 million for the construction of the railway system as negotiations with Spanish and Japanese contractors placed the project at $1 billion.
When completed, the first phase of the North Rail project, targetted for completion in 2008, is estimated to ferry 350,000 passengers daily.
The President said the China National Machinery and Equipment Corporation Group (CNMEG) also agreed to conduct a feasibility study of the construction of the second phase of the project, that will link Malolos, Bulacan to Clark, Pampanga.
Should the feasibility study lead to a financial arrangement suitable to both sides, the CNMEG will complete the construction of the North Rail by 2008.
The President said her government will prioritize strategic infrastructure projects such as interconnected railway systems, and improvement of roads and bridges and nautical highways, to decongest Metro Manila and stimulate trade and investments in the countryside.
Besides the North Rail project, the Chinese government also granted another loan of $33 million for the construction of a fish port and fish processing plant in Coron, Palawan.
The China National Offshore Oil Corporation and Philippine National Oil Company agreed to conduct a "joint seismic study for certain areas in the South China Sea" for three years to gather data. The agreement has no reference to petroleum exploration and production.
The two countries also agreed to promote cooperation in tourism and encourage each other’s nationals to visit the countries by relaxing visa restrictions on tourists.
On defense cooperation, the two countries also agreed to hold consultations on possible joint military trainings in a bid to build mutual trust to resolve the territorial dispute over the Spratlys island.
Topping the private business pacts is the $312 million investment to establish an integrated glass manufacturing facility in the Bataan Technological Park. It can generate as many as 15,000 jobs when it operates next year.
The President also stood witness to the signing of $100 million worth of investments in an equipment and supply contract for wireless high-speed data services between MultiMedia Telephony Inc and Huawei Technologies; the $100 million investment in the TGL Group production of electronics equipment; $50 million agreement for the supply of coal to the Philippine National Oil Corporation; $30 million iron ore processing plant in Camarines Norte; and, $28 million worth of credit facility from Herbal Medical University/Bio Medical Engineering Center for the Philippine International Trading Corp for the purchase of medicines.
Bilateral ties with China are expected to be further strengthened with the visit of Chinese President Hu Jintao to the Philippines in June 2005, upon the invitation of the President, for the 30th anniversary of diplomatic relations between the two countries.
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