China open to hybrid financing for Philippines infra PPP projects

MANILA, Philippines - Beijing has agreed to explore the possibility of co-financing with other multilateral lending institutions the 40 proposed infrastructure projects presented by the Philippine government last week, the Department of Finance (DOF) said.

Finance Secretary Carlos Dominguez said Chinese Commerce Minister Gao Hucheng had welcomed the Philippines’ proposal to consider hybrid financing arrangements to implement the infrastructure projects submitted for China’s assistance.

A hybrid financing scheme combines the use of official development assistance (ODA), and development aid and loans from multilateral agencies, such as the World Bank, Asian Development Bank and the China-led Asia Infrastructure Investment Bank.

Dominguez said the Chinese government seeks to determine if executing such arrangement would lead to a more efficient and smooth operation of the projects.

He added ranking Chinese officials have also recognized the urgent need to implement the projects the Philippines proposed to China for possible funding.

Both parties also agreed on the importance of “openness and transparency” in the implementation of the memorandum of understanding signed during President Duterte’s state visit to China last year, as well as the projects China would underwrite in the future.

A high-level Philippine delegation led by Dominguez went to Beijing last Jan. 23 to 24 to present to Chinese officials 40 infrastructure projects for possible assistance and funding.

Details of the proposed projects will be further discussed in Manila this month.

Of the 40 projects, 15 are being proposed for loan financing while another 25 were submitted for feasibility study support.

Three of the submitted proposals were large-scale projects in the field of irrigation, logistics and utilities, with a combined requirement of $3.4 billion.