Multilateral loans eyed for revival of Bicol railway

The Philippines may once again turn to multilateral institutions for financing, this time to pursue the P175-billion revival of the Bicol Express, a project that was originally pitched by the government to China.

- ELIJAH FELICE ROSALES

The STAR learned from multiple sources that the Philippines may likely end up borrowing from the Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB) to rebuild the Bicol Express through the Philippine National Railways (PNR) South Long Haul.

If this funding arrangement is taken, sources said the government has two options on how it can proceed with the project.

First, the Philippines can split the project cost between the ADB and AIIB, similar to how it plans to fund another rail project, the Metro Rail Transit Line 4. The government is seeking $1 billion from the ADB and $537.4 million from the AIIB to put up the MRT-4.

Otherwise, the government can obtain all financing from the AIIB, but the loans will be issued in tranches. A source said the AIIB may have to divide its lending in pieces, as it is working with a capital lower than that of the ADB and World Bank.