After China Exits $850 Million Freight Railway Project, Philippines Turns To US, Japanese Investors

The Philippines is seeking financial support from Japanese and American lenders for a 50-billion-peso ($850 million) freight railway project after China withdrew its backing.

Delfin Lorenzana, chairperson of the Bases Conversion and Development Authority (BCDA), revealed this in an interview with Nikkei Asia.

The proposed railway aims to connect former US military bases — now commercial hubs — and is set to be a crucial part of the Luzon Economic Corridor. This corridor represents a collaborative economic project among the United States, Japan, and the Philippines, conceived during a recent trilateral summit at the White House.

The Subic-Clark freight railway project plays a crucial role in the Luzon Economic Corridor, a significant infrastructure endeavour designed to improve connectivity between Subic, Clark, Manila, and Batangas, all situated on Luzon Island.

This ambitious project seeks to link three primary ports, two international airports, and an industrial park in the northern Philippines.

The Philippines government aims to commence construction of the Subic-Clark-Manila-Batangas railway — central to the Luzon Economic Corridor — by 2027. This 250-kilometre railway will connect Subic and Batangas, traversing through Metro Manila.

It is expected to enhance logistics, lower transportation costs, and foster greater economic integration across the region.

BCDA, which manages redevelopment projects on former US military bases since their withdrawal in the early 1990s, is spearheading the Subic-Clark railway project.

This freight railway is intended to link Subic, a former US Navy base, and Clark, which once housed a US Air Force base.

The agency now hopes that with China’s withdrawal, US and Japanese lenders may step in to revitalise the entire project. Further, BCDA is also seeking to draw investment from additional sources, such as Australia and India.