Chinese bank to give PH firms $3B credit line

Philippine President Rodrigo Duterte (left) and Chinese President Xi Jinping shake hands after a signing ceremony in Beijing, China./AP

Beijing — The Bank of China will open on Friday a $3 billion credit facility for Philippine industries and infrastructure in a deal to be sealed as the concluding activity of President Rodrigo Duterte’s state visit to the world’s second largest economy.

The Inquirer learned that eight Filipino conglomerates and corporations will enter into an agreement with one of China’s biggest state-owned financial institutions.

“They want to give us a credit line for any use we may have for it,” one company official said. “It will most likely be [loaned out] at market rates.”

The conglomerates that will enter into the agreement with the Bank of China are Gokongwei-owned JG Summit Holdings; Gotianun-owned Filinvest Development Corp.; Manuel Pangilinan-led Metro Pacific Investments Corp.; Sy family-controlled SM Investments Corp.; the International Container Terminal Services Inc.; and Zobel family-led Ayala Corp.

Also to enjoy the benefits of Bank of China’s credit line are Pan Pacific Renewable Power Philippine Corp. as well as Udenna Corp. of Davao-based businessman and Phoenix Petroleum owner Dennis Uy.

The Bank of China will also enter into an agreement with the Department of Trade and Industry and the Philippine Chamber of Commerce and Industry for strategic cooperation on small and medium enterprises.

The state-owned bank will be represented in the signing ceremonies by its chair, Tian Guiling, while the Philippine side will be represented by the CEOs of the respective conglomerates.

Aside from the $3 billion in credit facilities made available by Chinese banks, Duterte and Chinese President Xi Jinping agreed to enter into bilateral negotiations to resolve its maritime dispute — a 180-degree turn from the Philippines’ stance of engaging only in multilateral talks over overlapping territorial claims in the West Philippine Sea.

As part of the deal, officials of both nations signed 13 agreements and memoranda of understanding (MOU) that included a key deal to establish a “Joint Coastal Guard Committee on Maritime Cooperation” as a prelude to greater cooperation in the disputed waters.

The Inquirer learned that during their bilateral talks, Mr. Xi commuted $6 billion worth of soft loans from the Chinese government to the Philippines, and another 100 million yuan or about $15 million was committed to aid Mr. Duterte’s war on drugs through the establishment of rehabilitation facilities — details confirmed by both Finance Secretary Carlos Dominguez and Presidential Communications Secretary Martin Andanar.