China welcomes Philippines' planned Panda bond offering

MANILA, Philippines — China on Monday welcomed the Philippines’ planned maiden Panda bond offering to diversify funding sources further, taking advantage of the renewed and strengthening ties between the two countries that soured over a sea dispute.

Finance Secretary Carlos Dominguez III—who spearheaded a “non-deal roadshow” in China last month to entice potential buyers of the Panda bonds—earlier said the government may raise around $200 million from the issuance of Panda bonds or yuan-denominated securities in the second half of the year.

READ: Philippines pitches Panda bonds

In a press conference in Beijing, Chinese Foreign Ministry spokesperson Hua Chunying welcomed such a move from the Philippine government, adding that such cooperation would help develop Manila’s dilapidated infrastructure.

“We believe the relevant measures will help deepen our cooperation on finance and investment and boost the Philippines' infrastructure construction and advance the China-Philippine relations in an in-depth way,” Hua said.

“Since the overall turnaround of China-Philippine relations last year, cooperation in various fields between the two countries have thrived,” she added.

Ties between the two countries strained after the Philippines filed and won a case in a United Nations-backed tribunal against China’s sweeping claims in the South China Sea.

Taking office shortly before Manila’s legal victory against Beijing, President Rodrigo Duterte sought warmer relations with the Asian power by setting aside the international court’s ruling in exchange for billion dollars’ worth of Chinese investments.

According to Dominguez, the administration’s ambitious infrastructure program called “Build Build Build” would be funded by a combination of resources from the state’s proposed comprehensive tax reform program, foreign development aid and commercial loans.

As of June this year, the Philippine government has submitted a total of 40 projects for possible support from China. Fifteen of these are for possible loan financing, while 25 were submitted for feasibility study support.

Meanwhile, some lawmakers in the Senate are pushing for the improvement of the government’s vetting system for foreign-funded investments.

The government is seeking P140 billion from China to fund three flagship infrastructure projects, according to the Department of Finance.