Japan aid to fund Mindanao bridge, rail projects

Asian Economic News, June 7, 1999

TOKYO, June 3 Kyodo

Philippine President Joseph Estrada said Thursday his government may use a package of Japanese aid money to construct a bridge and rail line on the southern Philippine island of Mindanao to foster peace and development in the Muslim-populated region.

Estrada, who arrived in Tokyo on Wednesday on a five-day working visit, was speaking at a news conference about how the Philippines might spend some of the 1.4 billion yen (about 11.7 million dollars) which Japan has promised the country to help it out of the Asian economic crisis.

Although Estrada did not provide any details about the Mindanao proposals, his economic planning chief Felipe Medalla said the Philippine government is drawing up a list of projects it intends to submit shortly to Japan.

The projects would be funded under the "Miyazawa plan," named after Japanese Finance Minister Kiichi Miyazawa, who unveiled the 30 billion dollar aid initiative late last year. The plan is aimed at helping Japan's Asian neighbors that were hit hard by the economic downturn that began in mid-1997.

In January, Miyazawa announced that 1.4 billion dollars of the money will go to the Philippines.

Medalla, who is accompanying Estrada on his Tokyo trip, said Manila has not yet submitted any formal proposals to Japan on projects funded by the aid money, given that the initial amount promised by Japan concerns mainly budget support and loan guarantees.

But a plan being drafted by the Philippine government, he said, contains the rail line and bridge projects. The bridge over Panguil Bay would link the island's Misamis Occidental and Lanao del Norte provinces. Other proposed projects would expand Manila's mass transit system and build a new airport in Iloilo in the central Philippines.

"We want to make sure that the projects are well-designed and documented before we submit them to the government of Japan," Medalla said.

Estrada has told Japanese business leaders that he intends to propose to Japanese Prime Minister Keizo Obuchi the construction of the rail network, dubbed the Philippine-Japan friendship railway system, using Japanese aid, according to a news release issued by the Philippines government.

The areas covered by the rail and bridge project are recovering from years of conflict between Muslim secessionist rebels and the military. The southern Philippines contains some of the poorest areas of the country.

Estrada is scheduled to meet Obuchi on Friday before leaving for South Korea on Sunday.

Meanwhile, Philippine Finance Secretary Edgardo Espiritu said the Philippines is projecting 2.6% growth as a high-end target for gross domestic product (GDP) and 3.7% as the upper ceiling for gross national product (GNP) for this year.