Philippines Wants US, Japan to Fund Freight Railway Project After It Drops Funding Talks With China

By Trisha Andrada

Apr 20 2024, 08:07 AM EDT

The Philippines is seeking alternative financing deals for a freight railway project after funding talks with China were dropped. An official in charge of the project hinted that the United States and Japan may help build the railway.

"Hopefully they take it and invest here," Delfin Lorenzana, head of the Bases Conversion and Development Authority, told Bloomberg on Friday. The agency handles the development of former military bases.

Philippines Wants US, Japan to Fund Freight Railway Project After It Drops Funding Talks With China — The Philippines is seeking alternative financing deals for a freight railway project after the funding talks with China were dropped. James Wheeler / Pexels

Philippines Wants US and Japan to Take Over on a Freight Railway Project

Bloomberg reported that Delfin Lorenzana, a former defense secretary, said he would be more comfortable if the US and Japan took over the Subic-Clark railway project.

"If not them, maybe South Korea, or other countries that are friendly to us," he told the outlet, adding that the government is also considering the World Bank and Asian Development Bank for funding assistance.

Last year, the Philippines said it would withdraw its request for Chinese loans to finance three projects, including the 71-kilometer Subic-Clark railway, due to China's lack of progress.

Relations between China and the Philippines have been deteriorating due to competing territorial claims in the South China Sea.

Philippines, US, and Japan Unveil Luzon Economic Corridor

During their meeting at the White House on April 11, US President Joe Biden, Japan's Prime Minister Fumio Kishida, and Philippine President Ferdinand Marcos Jr. unveiled the Luzon Economic Corridor, which includes the 50-billion-peso ($868 million) Subic-Clark railway that will connect the former US military bases turned commercial hubs.

A trilateral event to promote investment in the project is being set for May at the Indo-Pacific Business Forum, which will be led by the US and take place in Manila.

After the conference in Washington, the Philippines said its goal is to attract investments worth roughly $100 billion during the next five to ten years.

The project aims to improve connectivity between Subic Bay and Clark, Manila, and Batangas province in Luzon and boost investments in agribusiness, infrastructure projects, renewable energy, and semiconductor supply chains.