China and the Philippines have signed a $940-million infrastructure deal, the biggest Chinese government-funded project in the Philippines.

The project is aimed at building the Subic-Clark railway project connecting Subic Bay and Clark Air Base, two former US military bases.

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Announced by the Chinese envoy to the Philippines Huang Xilian, the Subic-Clark railway project comprises a 71-km single-track railway, located in south-central Luzon, connecting Subic Bay Freeport Zone and Clark International Airport and finally linking the North Railway Project.

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The Subic Bay was the site of a former repair and supply base for the US Navy’s 7th Fleet and the Clark Air Base used to be a US Air Force base. The former has been turned into the Subic Special Economic and Freeport Zone and Clark Air Base is now used by the Philippine Air Force and houses Clark Freeport and Special Economic Zone.

Announcing the deal, the Chinese envoy said in a statement on Facebook: “Our cooperation continues! China and the Philippines just signed the commercial contract for the Subic-Clark railway project”.

“This is so far the highest-funded G2G project between the two countries valued at approx. $940 million and is the flagship project under the administration’s “Build, Build, Build” program,” Huang added.

The project is likely to be completed within 42 months. The idea is to build resilient linkages between the commercial zones along the Subic-Clark corridor, as per the official statement.

The announcement was made during Chinese Foreign Minister Wang Yi’s visit to the Philippines. The project highlights China’s role as a funder to Manila’s infrastructure projects under President Rodrigo Duterte’s administration.

Duterte, after coming to power in 2016, strengthened relations with Beijing. The Philippine government in 2017 had begun the “Build, Build, Build” infrastructure program, under which it would spend 8 to 9 trillion pesos (US$160 billion to 180 billion) in the medium term, to improve the country’s public transportation system.

During the Chinese foreign minister’s visit, the Philippines has been promised half a million doses of Covid-19 vaccines, US$1.34 billion in loan pledges for infrastructure projects, and US$77 million (500 million yuan) in grants.

The visit has reaffirmed Beijing’s support for its “closest neighbor”. Wang had said: “As a friend of the Philippines and your closest neighbor, we will firmly stand with the people of the Philippines until the defeat of this virus.”

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