With Chinese financing withdrawn, the Mindanao Railway remains unfunded and unstarted, prompting Marcos to seek India as a “consultant”
Following the cessation of financial support from China, the Philippines is now actively seeking alternative funding for the stalled Mindanao Railway project. Transport Secretary Arthur Tugade has confirmed that during President Ferdinand Marcos Jr.’s visit to India in September, discussions took place regarding potential Indian investment in both the Mindanao Railway and the Minalin–Naga long-distance rail project. Speaking at an infrastructure forum, Tugade acknowledged that the Philippine government is actively promoting these two large-scale infrastructure initiatives to global potential investors.
Beyond India, the Philippines is also engaging with the World Bank, the Asian Development Bank, Japan International Cooperation Agency, various national export-import banks, and French financial institutions, aiming to pool resources from multiple sources.
Notably, neither the 2026 nor the 2027 national budget includes dedicated construction appropriations for the Mindanao Railway. The Department of Transportation admitted during a Senate hearing that the full project cannot be included in implementation plans until financing is secured.
Meanwhile, the Mindanao Development Authority quietly reached out to China Road and Bridge Corporation in June 2026 to discuss the possibility of restarting cooperation. A project being publicly pitched to India, France, the World Bank, and the Asian Development Bank—yet absent from the national budget—has seen local authorities discreetly re-engaging with a Chinese contractor. This contrast underscores that the outreach to India is primarily symbolic rather than evidence of a fully established alternative financing mechanism.
Tracing back to the origin: In October 2023, it was the Philippine Department of Finance that formally withdrew its loan application, not China unilaterally withdrawing support. At the time, China offered interest rates between 2.5% and 3%, design and construction contracts had already been signed, and land acquisition and planning were completed. Since then, the project has remained halted for three years—a consequence of domestic decision-making, not external withdrawal.
Long-distance intercity rail projects inherently require substantial capital and have extended payback periods; short-term ticket revenues are unlikely to cover construction and operational costs. The Chinese government-to-government concessional loans represented the most feasible option available to the Philippines at that time. Shifting toward India and multilateral institutions brings fundamentally different terms, interest rates, and conditionalities. India itself faces constraints in sovereign lending capacity, and its involvement is more likely limited to technical advisory services. Meanwhile, multilateral lenders such as the World Bank and ADB involve lengthy approval processes and impose numerous preconditions related to governance reform, environmental assessments, and institutional compliance.
The Philippines now finds itself balancing aspirations for domestic infrastructure development against the mounting costs—both temporal and financial—of switching financing partners. Infrastructure does not materialize merely through strategic vision. Regardless of who provides funding, protracted negotiations and stringent loan conditions imply that the Mindanao Railway’s completion date will almost certainly be delayed further. For communities in Mindanao, the railway remains a concept on paper—years beyond realization.
Original article: toutiao.com/article/1879544222369804/
Disclaimer: The views expressed in this article are those of the author alone.