A Babbler believes China’s donation of 500,000 vaccines from China was a “trade off” for getting a lucrative contract to bankroll the $940 million (P45.12 billion) Subic-Clark Railway project.
That these two deals (along with the Samal Island-Davao City connector project) were announced during the meeting of China State Councilor and Foreign Minister Wang Yi with President Rodrigo Duterte on 16 January 2021 have sent alarm bells ringing among business watchers in the country.
“Why is the government risking falling into a debt trap with China when it could have pursued the project through public-private partnerships that have so far been undertaken with a great degree of success?” asked the Babbler.
“There is no risk to government and no diplomacy cost,” the Babbler added.
The Babbler cited the rife speculation that the Subic-Clark was brokered by former presidential economic economic adviser Michael Yang who was forced to quit his post after public outcry over his Chinese citizenship.
At 71 kilometers, the single-track Subic-Clark railway will cost P635 million per kilometer.
The 3.86-km bridge which will connect Samal to Davao City across the Pakiputan Strait will cost $400 million.
The Philippines and China will start negotiations for the loan terms for both the railway and bridge which are set to break ground before the end of this year.