China is ready to restart talks on oil and gas exploration with the Philippines as soon as the latter gives the go signal, Chinese Ambassador Huang Xilian said Wednesday.
“In the field of energy, we hope that we will continue to work on oil and gas cooperation. We hope we start that negotiation and find some solution for the benefits of our two peoples to meet the need or the demand of energy of this country and China,” Huang told reporters in Pasay City.
“I think with the new administration in place, we are ready to restart our negotiation anytime.”
Two weeks ago, China said it was negotiating with the Philippines over the funding of some infrastructure projects after a transport official said Beijing had pulled its funding commitment to three big-ticket railway projects.
The Chinese Embassy clarified this after Transport Undersecretary for Railways Cesar Chavez revealed that Beijing had failed to act on a government request for funding for the Philippine National Railways Bicol project, Subic-Clark Railway Project, and the first phase of the Mindanao Railway Project.
Chavez earlier said President Ferdinand Marcos Jr. ordered the Department of Transportation to renegotiate the loans with Beijing or open negotiations with other countries.
Meanwhile, Huang said Beijing is open to working with Manila as it shifts to renewable energy sources.
The two countries signed a memorandum of understanding (MOU) on joint oil and gas development in the West Philippines Sea in November 2018.
But after three years of negotiations, the Philippines terminated the talks, citing possible issues with the Constitution just before former President Rodrigo Duterte stepped down from office.
In addition, the envoy said the two nations must also “work harder” on developing clean energy as a means of addressing the climate crisis.
“Last year, the export of electric vehicles of China accounts for more than half of the world’s orders. We are one of the leading players in terms of clean energy and so we are ready to work with this country to share our technology, share our expertise to move forward hand in hand,” he said.
A fortnight ago, the Chinese Embassy did not directly mention the funding withdrawal for the railway projects but vowed to “tap its own advantage and support the Philippines to improve its infrastructure.”
“Our two sides have been negotiating technical issues and made positive progress to move the projects forward,” the embassy said.
The embassy said: “China is open for technical discussions over our G-to-G [government-to-government] projects, and is ready to carry our cooperation forward, in close communication with the Philippine new administration.”
The embassy added that China has helped the Philippines complete 17 projects while more than 20 projects are under implementation or in progress.
“Over the past two years, COVID-19 has impacted the implementation of some projects, hindering the site availability, causing delays of procurement, affecting goods mobility, and so on.”
“Despite those difficulties and challenges, our two sides have worked tirelessly to push the projects forward and yielded rich outcomes, spanning from the pandemic response and disaster relief to infrastructure, agriculture, and other fields,” the embassy said.
The Chinese Embassy described the phone conversation between Chinese President Xi Jinping and Marcos on May 18 and recent high-level visits as having ushered in “a new era of China-Philippine friendship.”
“Governments of the two countries are dedicated to further enhancing friendship and mutual trust, adhering to good-neighborliness, and deepening mutually beneficial cooperation. China’s policy towards the Philippines has always been and will continue to be consistent and stable as ever,” the embassy said.
The Chinese Embassy expressed confidence that “continuity” would be secured in relations between the two countries as well as bilateral practical cooperation.
Chavez said China’s funding commitment for the railway projects was “deemed canceled” as China has been unresponsive to the Philippine government’s loan application since 2019.
He said the Chinese bank was asking for 3 percent interest on the loans, much higher than the 0.01-percent rate charged by Japan.
Two lawmakers had said renegotiations should include a lowering of interest rates on Chinese loans.
Senator Grace Poe said the renegotiation of loans should address interest rates and payment terms.
“The President’s directive presents an auspicious opportunity to go back to the drawing board and craft deals that are fair and will produce tangible benefits to the Filipino people,” Poe said in a statement.
“Renegotiation should iron out issues that saddled the previous agreements, including interest rates and payment terms.”
Albay Rep. Joey Salceda, chairman of the House ways and means committee, urged the government to explore alternative financing options for the Calamba-Bicol railway.
“Of course, the Chinese yuan is generally a more stable currency than the Japanese Yen, but factoring in exchange rate parity, the Japanese offer would still be significantly more attractive, by around 2.5 percentage points, even taking the worst peso performance versus the yen and the best peso performance versus the yuan,” he said.
“So, what I gather is we asked for a better rate, and China appears to have stopped responding,” said Salceda, who noted that the Bicol railway would also benefit nearby regions.
He said if a Japanese offer comes in, the country should take it, even though it might cause some initial disruption.
“If China wants to continue the deal, they should offer more competitive rates. Anyway, I think we should open up to other offers,” he added.