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By Darwin G. Amojelar, Reporter
THE National Economic and Development Authority
(NEDA) has put on hold the negotiations for a five-year bilateral
loan framework owing to allegations of corruption over the botched
National Broadband Network (NBN) project.
Socioeconomic Planning Sec. Augusto B. Santos
told reporters that the five-year Joint Action Plan for Strategic
Cooperation between the Republic of China and the Philippines will
be put on hold until the issues on the $329 million NBN project are
resolved.
Santos had said that the framework should be
signed in the first half of the year.
The loan framework will fund government projects
in agriculture, fishery, public works and infrastructure, housing,
mineral resource development, and energy among others.
The NBN fiasco arose due to allegations that the
deal with contractor ZTE Corp. of China had been padded by $130
million in kickbacks to high government officials.
“Because of this [controversy] it [loan
framework] will be put on hold,” Santos said.
Trade Secretary Peter B. Favila had said that
Beijing officials were disappointed over the Philippines’ handling
of alleged corruption in the government contract with the Chinese
firm.
The NBN project was suspended by President
Arroyo in September after the corruption allegations surfaced.
Documents from NEDA showed that as of last year,
Beijing committed $2.10 billion in infrastructure project assistance
to the Philippines, but the release of the funds is pending until
the two governments sign a loan agreement.
These projects include the controversial NBN
project of the Department of Transportation and Communication, and
the $551 million Cyber Education Project of the Department of
Education, of which $474 million will be funded through loans from
China.
Also part of the package is the $958.59 million
Laiban Dam Project of the Metropolitan Waterworks and Sewerage
System (MWSS), of which $910 million will come from China and the
remaining $47.93 million would form the Philippine counterpart.
In addition, the Chinese will also provide
a $260 million loan to Philippine National Railway’s Main Line
South Railway Project Phase 1 from Calamba to Lucena, $118.77
million for the Angat Water Utilization and Aqueduct Improvement
Project of MWSS, $57.56 million for the North Rail Project Phase 1
Section 2, Malolos to Clark, and $63.67 million for the Mass Housing
Program of Housing and Urban Development Coordinating Council.
Of the total $2.1 billion, the Philippines and
Beijing governments already signed loan agreements for $1.11 billion
as of September last year.
These projects include the $35 million Banaoang
Pump Irrigation Project of the National
Irrigation Administration in 2002, the $27.6
million General Santos Fish Port Complex Expansion Project of the
Department of Agriculture, and the $50 million Non-Intrusive
Container Inspection Project Phase 1 of the Bureau of Customs.
The Chinese government also provided $400
million financing for the controversial $503.05 million Northrail
Project Phase 1 from Caloocan to Malolos, Bulacan, and a $500
million loan for the $573.66 million Northrail’s Phase 2 from
Malolos to Clark, Pampanga. These projects are funded through the
Preferential Buyer’s Credit from the Export-Import Bank of China.
The Chinese concessional loan interest ranges
from two to three percent per annum with 20 years maturity inclusive
of five years grace period.
Before a government project is implemented, a
loan agreement between the two countries is needed.
The Philippines’ ties with China started on
June 9 1975, but the year 2000 was a significant milestone with the
establishment of diplomatic relations between the two countries.
The two countries signed a Joint Statement on
the Framework of Bilateral Cooperation, which set the course for the
future direction of Philippines-China relations in the areas of
defense and military, trade and investment, science and technology,
agriculture, education and culture, judicial-legal, and other areas.
President Arroyo had said that the country has
“very good prospects” of attracting huge investments from
mainland China’s corporate giants, and getting significant aid
from Beijing.
China is one of the fastest growing economies in
the world and a major regional power with a modernizing military.
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