The loan is payable in 20 years. The Department of Finance says the bridge will boost trade and generate jobs in Mindanao.
MANILA, Philippines – President Rodrigo Duterte secured his first renminbi-denominated loan toward the end of his term for the construction of the P19.32-billion bridge connecting Samal Island and Davao City.
On Monday, June 13, the Philippines and China exchanged documents for the Samal Island-Davao City Connector project, a two-way, four-lane bridge. The documents were signed last May 31.
Finance Secretary Carlos Dominguez III, on behalf of the Philippine government, and Chinese Ambassador to the Philippines Huang Xilian, representing Beijing, exchanged documents on the framework agreement and the loan agreement for the concessional loan.
The concessional loan, which amounts to RMB2.34 billion or P17.4 billion, covers 90% of the financing requirements of the 3.86-kilometer bridge. The remaining cost will be shouldered by the Philippine government.
The loan has an interest rate of 2% per annum. It is payable in 20 years, inclusive of a 7-year grace period.
The Department of Public Works and Highways entered into an agreement with China Road and Bridge Corporation for the construction of the bridge.
The Department of Finance said the various master plans for Mindanao and the Davao Region “all aim to facilitate commerce and trade, generate jobs, [and] create wealth among the local government units.”
China’s financing commitments to the Philippines now total $1.1 billion. The other projects are:
- Chico River pump irrigation project
- Kaliwa Dam project
- project management consultancy of the Philippine National Railways South Long Haul project