Narrative
Full Description
Project narrative
On October 20, 2016, China Eximbank and the Government of the Republic of the Philippines signed a Memorandum of Understanding (MOU) on Financing Cooperation to facilitate the promotion of financing cooperation between the two parties. Then, on March 3, 2017, the Government of the Republic of the Philippines, through its Department of Foreign Affairs (DFA), sent a Note Verbale No. 17-1049 to the Chinese Government, through its Ministry of Commerce, related to the procedures and arrangements of the utilization of concessionary loans committed by the Chinese Government to support priority projects of the Government of the Republic of the Philippines, which was confirmed by Chinese Government on March 8, 2017. Then, on April 25, 2018, and August 19, 2021, the National Economic and Development Authority (NEDA) Board confirmed the Investment Coordination Committee's approval of the Three Priority Bridges Crossing Pasig-Marikina River and Manggahan Floodway Bridges Construction Project. The Government of the Republic of the Philippines then submitted a loan application on December 15, 2020 and a revised loan application on September 26, 2022 to China Eximbank for the Three Priority Bridges Crossing Pasig-Marikina River and Manggahan Floodway Bridges Construction Project. Several months later, on January 4, 2023, China Eximbank and the Government of the Republic of the Philippines — acting by and through the Department of Finance — signed two loan agreements for the Three Priority Bridges Crossing Pasig-Marikina River and Manggahan Floodway Bridges Construction Project (Contract Package 1) and two loan agreements for the Three Priority Bridges Crossing Pasig-Marikina River and Manggahan Floodway Bridges Construction Project (Contract Package 2). The parties signed an RMB 405,759,294.82 government concessional loan (GCL) agreement [NO. GCL20220100767] and a $58,508,945.16) preferential buyer’s credit (PBC) agreement [NO. P8C20220200569] for the Three Priority Bridges Crossing Pasig-Marikina River and Manggahan Floodway Bridges Construction Project (Contract Package 1). The GCL carries a 1.5% interest rate, a 0% default (penalty) interest rate, a 20-year maturity, a 7-year grace period, a 0.25% commitment fee, and a 0.25% management fee. The PBC carries a 2.5% interest rate, a 0% default (penalty) interest rate, a 20-year maturity, a 7-year grace period, a 0.3% commitment fee, and a 0.3% management fee. The borrower was expected to use the proceeds of the GCL and the proceeds of the PBC to finance 42.5% and 42.5%, respectively, of the total cost of the PHP 6,753,171,284.68 commercial contract (ID#19Z00041) between the Department of Public Works and Highways of the Republic of the Philippines and China Road and Bridge Corporation, which was signed on August 6, 2020. Package 1 involves the design and construction of North and South Harbor Bridge in Metro Manila. It was originally expected to be implemented in 1,279 days (May 2021-October 2024). The parties also signed an RMB 278,084,447.65 government concessional loan (GCL) agreement [NO. GCL20220110768] and a $42,370,197.60 preferential buyer’s credit (PBC) agreement [NO. PBC20220210570] for the Three Priority Bridges Crossing Pasig-Marikina River and Manggahan Floodway Bridges Construction Project (Contract Package 2). The GCL carries a 1.5% interest rate, a 0% default (penalty) interest rate, a 20-year maturity, a 7-year grace period, a 0.25% commitment fee, and a 0.25% management fee. The PBC carries a 2.5% interest rate, a 0% default (penalty) interest rate, a 20-year maturity, a 7-year grace period, a 0.3% commitment fee, and a 0.3% management fee. The borrower was expected to use the proceeds of the GCL and the proceeds of the PBC to finance 42.5% and 42.5%, respectively, of the total cost of the PHP 4,789,726,526.35 commercial contract (ID#20Z00006) between the Department of Public Works and Highways of the Republic of the Philippines and China State Construction Engineering Corporation Limited, which was signed on December 3, 2020. Package 2 involves the design and construction of Palanca-Villegas Bridge and Eastbank-Westbank Bridge 2. The Palanca-Villegas Bridge is located in the City of Manila while the Eastbank-Westbank Bridge 2 is located in Cainta, Rizal. It was originally expected to be implemented in 1,095 days.
Staff comments
1. The Chinese project title is 持的帕西格河桥梁项目. 2. The China Eximbank GCL agreement for Three Priority Bridges Crossing Pasig-Marikina River and Manggahan Floodway Bridges Construction Project (Contract Package 1) can be accessed in its entirety via https://www.dropbox.com/s/d9ywae1o0niiiwd/GCL%20Agreement%202022%20for%20Three%20Priority%20Bridges%20Crossing%20Pasi-Marikina%20River%20and%20Manggahan%20Floodway%20Bridges%20Project%20Contract%20Package%201.pdf?dl=0. The China Eximbank PBC agreement for Three Priority Bridges Crossing Pasig-Marikina River and Manggahan Floodway Bridges Construction Project (Contract Package 1) can be accessed in its entirety via https://www.dropbox.com/s/63fbr3i7gryxcpl/PBC%20Agreement%202022%20for%20Three%20Priority%20Bridges%20Crossing%20Pasi-Marikina%20River%20and%20Manggahan%20Floodway%20Bridges%20Project%20Contract%20Package%201.pdf?dl=0. The China Eximbank GCL agreement for Three Priority Bridges Crossing Pasig-Marikina River and Manggahan Floodway Bridges Construction Project (Contract Package 2) can be accessed in its entirety via https://www.dropbox.com/s/v0ykpx78yh49cq4/GCL%20Agreement%202022%20for%20Three%20Priority%20Bridges%20Crossing%20Pasi-Marikina%20River%20and%20Manggahan%20Floodway%20Bridges%20Project%20Contract%20Package%202.pdf?dl=0. The China Eximbank PBC agreement for Three Priority Bridges Crossing Pasig-Marikina River and Manggahan Floodway Bridges Construction Project (Contract Package 2) can be accessed in its entirety via https://www.dropbox.com/s/qglzqz4upwrd17u/PBC%20Agreement%202022%20for%20Three%20Priority%20Bridges%20Crossing%20Pasi-Marikina%20River%20and%20Manggahan%20Floodway%20Bridges%20Project%20Contract%20Package%202.pdf?dl=0.