US private firms to take part in Philippines’ China-backed infrastructure programme

18-Jul-2019 Intellasia | CNA | 6:02 AM Print This Post

US private firms to take part in Philippines’ China-backed infrastructure programme

Philippine and United States envoys announced on Tuesday (July 16) fresh US involvement in the Philippines’ ambitious infrastructure-building programme, which also has projects financed through Chinese loans and grants.

The announcement made on the concluding day of the US-Philippines 8th Bilateral Strategic Dialogue (BSD) is the latest sign of a continuing China-US power struggle in the Southeast Asian state.

It comes more than a month after the release of the first Indo-Pacific Strategy Report by the US Department of Defence, which calls China a “revisionist power” and highlights China’s “use of economic inducements” to “persuade other countries to comply with its agenda”.

The Build, Build, Build programme is Philippine President Rodrigo Duterte’s strategy to accelerate public spending on infrastructure, which the government said is targeted to reach between $157 billion and $177 billion from 2017 to 2022.

“We understand and applaud the Philippines government focus on infrastructure development, and we want to support that effort as much as possible,” US ambassador to the Philippines Sung Kim said in a press conference.

“Primarily, I think it would be through private sector participation in major Build, Build, Build projects.”

At least two loan deals with China have been signed for the Build, Build, Build programme, with more under way as critics point out their relatively higher interest rates compared to loans offered by alternative sources such as Japan.

In a statement released on Tuesday, newly confirmed US Assistant Secretary of State for East Asian and Pacific Affairs David Stilwell welcomed progress on “legislation which could provide more opportunities for US companies, especially in infrastructure, as part of the Build, Build, Build programme”.

Philippine ambassador to Washington Jose Manuel Romualdez specifically cited US involvement in the building of the New Clark City, an envisioned green city north of capital Manila.

The US emphasis on private sector participation in the Build, Build, Build programme is also in sharp contrast with the involvement of China’s state-owned enterprises in Philippine infrastructure projects.

State-owned HBIS Group Co Ltd, dubbed as China’s second-largest and the world’s third-largest steelmaker, is involved in the development of a 305ha iron and steel production base in Mindanao.

The $4.4 billion project will reportedly generate tens of thousands of jobs during its construction and subsequent phases.


With Duterte being the first Filipino president from Mindanao, the Build, Build, Build projects are focusing on the long-neglected group of islands that houses the country’s poorest provinces.

Since he took power in 2016, Duterte has embarked on what his aides call an independent foreign policy that is generally referred to as a pivot to China.

Duterte has secured multi billion dollar loan and trade pledges from China, as well as a framework for potential oil and gas exploration signed during Chinese President Xi Jinping’s visit to Manila late last.

In late 2018, state-owned Export-Import Bank of China signed a loan agreement to finance a controversial dam seen to alleviate water woes of Metro Manila’s eastern areas and outskirts but feared to worsen conditions in the volatile Sierra Madre mountain range, which is a key biodiversity area.

The Philippine government has dismissed concerns of a possible debt trap, saying commercial loans still have higher interest rates than loans offered by China.

China-funded infrastructure projects have at least a 10 per cent rate of return that can cover projected interests based on simulations, the government said.


Category: Philippines

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