The Philippines will tap the China-led Asian Infrastructure Investment Bank (AIIB) for help to co-finance two more government flagship projects—a dam for reliable water supply for Metro Manila and a railway linking the capital city to Albay—the Department of Finance (DoF) said.
Finance Secretary Carlos Dominguez 3rd said the Philippines will propose the new projects to the AIIB at an upcoming members’ meeting in June this year. Two other projects have previously been presented to the AIIB.
The new projects—the New Centennial Water Source-Kaliwa Dam Project in Quezon province costing $374.03 million and the south line of the North-South Railway Project (NSRP) worth $3.01 billion—have secured Chinese official development assistance (ODA), but need additional funding, the DoF said.
“As the infrastructure projects are brought into light, we will tap the AIIB, particularly the infrastructure projects that will receive Chinese ODA [official development assistance]. We will mix that together with the AIIB funds,” Finance Secretary Carlos Dominguez 3rd told reporters over the weekend.
“Certainly I think we will look at the Kaliwa Dam, most likely, the railways particularly the big railway to the south,” he added.
The New Centennial Water Source Project is expected to provide water security, reliability and additional supply for Metro Manila. It is planned to be site-specific, zeroing in on the Kaliwa-Kanan-Agos River Basin as an alternative water source. It will involve the construction of a dam at the Kaliwa River (Laiban Dam), and a smaller dam (Kaliwa Dam) downstream to maximize the water supply, and to ensure short- and long-term supply for Metro Manila and its adjoining areas.
The south line of NSRP covers Metro Manila to Legazpi City, Albay, plus a number of existing and proposed branch lines totaling about 653 kilometers. It consists of commuter railway operations between Manila’s Tutuban station and Calamba City and long-haul railway operations between Tutuban and Legazpi. That will also include extended long-haul rail operations on the branch line between Calamba and Batangas, and an extension between Legazpi and Matnog.
“That will be pitched to them. I tell you, for instance, that the south railway project is so big that it will eat up all the $500 million we said we would borrow from AIIB. But definitely, the Kaliwa Dam will need some kind of funding on that,” Dominguez said.
Referring to the June meeting of the AIIB, the DoF secretary said, “I will certainly attend that meeting. It is very important for us.”
The Philippines is the latest country to join the AIIB, with the Senate ratifying the Articles of Agreement over the country’s membership to the China-led bank just late last year.
The dam and the railway projects are in addition to two initial Philippine projects that the AIIB has said it would co-finance with other multilateral lending institutions: the Metro Manila Flood Management Project and the EDSA Bus Rapid Transit system.
AIIB President Jin Liqun had expressed enthusiasm in finalizing the infrastructure projects in the Philippines for financing by the AIIB after the Philippine Senate ratified the bank’s Articles of Agreement.
“We are all very eager to finalize the infrastructure projects in your country … This time, we are very happy we can really talk about something to do in your country,” Jin said at the time.
The P23.46-billion Metro Manila flood control project supported by the World Bank is now being processed for project financing by the National Economic and Development Authority (NEDA).
The other initial project, the P37.76 billion EDSA Bus Rapid Transit system, is partly funded by the Asian Development Bank.