Poe questions DOTr's decision to stick to China as railway loan source

Sen. Grace Poe questioned the decision of the Department of Transportation (DOTr) to pursue renegotiations with China on three major railway projects which were earlier withdrawn by the previous administration.

During the hearing of the Senate finance subcommittee led by Poe on the proposed 2023 budget of the agency, the senator pointed out that Japan International Cooperation Agency (JICA) offers a better term with lower interest rate for the loans.

"We don't understand how the 2-percent interest of China is better compared to the 0.1 percent of Japan," Poe said.

Transportation Undersecretary Timothy John Batan confirmed that the DOTr has written the Department of Finance requesting the resubmission of loan application with China.

The loans are for the Mindanao Railway Project's Tagum-Davao-Digos segment, the Philippine National Railways Calamba to Bicol line, and the Subic-Clark Railway Project.

Batan explained that applying "currency parity conversion," the interest rates offered by the two countries are allegedly not far apart.

The DOTr official also said that the "JICA lending ceiling was almost depleted."

Poe said the government should explore funding from other countries which are similarly open to investing in the country's railways.

"We know there's a cap, but there are other lenders," Poe emphasized.

The senator said the DOTr has come up with completion targets for the railway projects when it has yet to obtain complete funding.

"Alam naman natin na walang gagalaw kung walang pera. I understand there's due diligence but we are quite presumptuous," Poe added.

Of the DOTr's proposed budget of P167.12 billion, the rail sector will get P112.85 billion, or over 400-percent increase in allocation compared with its 2022 budget.