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Foreword

The Republic of the Philippines and the People's Republic of China (hereinafter referred to as "the Philippines" and " China", respectively, and collectively as "both sides") enjoy a time-honored friendship and share wide-ranging common concerns and interests in regional and international affairs . It is in the long-term interests of both sides to further enhance the traditional friendship and cooperation as the shared aspirations of both people's, contributing to peace, stability and prosperity in the region.

In recent years, the two countries have continuously exchanged high-level visits , deepened mutual understanding and trust , and promoted political and strategic cooperation. In the fields of economy and trade, science and technology , and society and culture , the two countries have also developed in-depth bilateral cooperation and reached a series of mutually beneficial cooperation agreements. The Philippines and China issued a joint statement in November 2017 during Chinese leaders' visit to the Philippines and agreed to jointly implement the Six - Year Development Program for Trade and Economic Cooperation Between the Government of the Republic of the Philippines and the Government of the People's Republic of China (2017-2022) to advance bilateral cooperation in infrastructure , capacity and investment, economy and trade , agriculture , livelihood development, social and cultural field, among others. Moreover , both sides signed the Memorandum of Understanding on Jointly Promoting the Second Basket of Key Infrastructure Projects Cooperation Between the Department of Finance of the Republic of the Philippines and the Ministry of Commerce of the People's Republic of China, and the Memorandum of Understanding on Jointly Promoting the Philippine National Railways South Long Haul Project Cooperation between the Department of Transportation of the Republic of the Philippines and the Ministry of Commerce of the People's Republic of China, among others .

In order to strengthen the link between China's Belt and Road Initiative and the Philippines' Long Term Vision, put into practice the consensus reached between China and the Philippines on strengthening infrastructure cooperation , and promote further in ­depth cooperation, both sides jointly develop and adopt the Infrastructure Cooperation Program between the Government of the Republic of the Philippines and the Government of the People's Republic of China (hereinafter referred to as "the Program") to serve as guidelines for bilateral infrastructure cooperation for the next ten years.

Chapter I -Objectives, Principles and Term

1.1 Objectives

1.1.1 To build a more effective framework for infrastructure cooperation between the Philippines and China, to further improve the investment environment, to facilitate the stable and orderly cooperation and optimize social and economic development of both countries .

1.1.2 To utilize their comparative advantages, collaborate in multiple ways, enrich the substance of cooperation, improve the quality of such cooperation and expand its scope.

1.2 Principles

Both sides agree to push forward the implementation of the Program based on the following principles:

1. 2 . 1 The identification of cooperation areas and projects should be guided by both countries' demands and economic situations and based on strategic merits, growth potential, driving effect, as well as feasibility, security considerations and existing relevant legal guidelines.

1.2.2 The cooperation projects shall be identified based on the most cost-efficient and cost-effective measures to attain the best value for money through the application of value methodologies , such as, but not limited to, Value Engineering/Value Analysis (VE/VA ) .

1.2.3 The cooperation projects will be implemented, under the guidelines of "government guidance, independent decision-making by enterprises and market-based operation", in an orderly manner from easy to difficult on the basis of the specific conditions and preliminary work.

1.3 Timeline

The timeline of the Program is from November 2018 to November 2028.

Chapter II - Key Areas of Cooperation

Both sides recognize the growing demand of the Philippines on infrastructure brought by rapid economic growth, rapid population growth and urbanization. Infrastructure is one of the key areas for bilateral cooperation.

Both sides agree upon transportation, agriculture, power, watershed management , and ICT/telecommunications as main cooperation areas.

2.1 Transportation

2.1.1 Railways

2.1. 1 . 1 Railway is one of the main modes of transportation in the Philippines. Economic development brings along increasing demand on long-distance, large-volume, and modern-railway transportation. The existing transportation system needs to be upgraded and expanded.

2 . 1.1.2 Both sides note China's rich experience in railway infrastructure construction and lead in high-speed railway technology as well as a huge potential for bilateral cooperation. China will share its experience in railway construction with the Philippines.

2. 1 . 1.3 Both sides agree to encourage enterprises to participate in the following priorities under railway cooperation, subject to agreement by both sides:

( 1) Construction of the Philippine National Railways South Long Haul Project , Subic-Clark Railway Project, Mindanao Railway Project, and other railway projects; and

(2) Conduct of feasibility studies for priority railways, e . g., subsequent phases of the Mindanao Railway Project, and other proposed railway projects .

2 . 1.2 Roads

2.1.2.1 As of 2017, the total length of the road network in the Philippines is 210,463 kilometers, of which national road takes up 16%; provincial , 14%, and other local roads , 70 % . There is a need to upgrade and develop roads to meet the growing transportation demands , and since traffic congestion is still a major problem facing social development, especially in urban and metropolitan areas.

2 . 1. 2 . 2 China is willing to share its experience in highway construction, operation and management and further deepen highway cooperation with the Philippines.

2 . 1 .2.3 Both sides agree to encourage enterprises to participate in the following priorities under road cooperation :

(1) Conduct of feasibility studies for priority highways and roads;

(2) Building of intermodal terminals, transportation control centers and other projects to further improve the highway route systems; and

(3) Development of highway network plans in various metropolitan areas and regions.

2.1.3 Bridges

2. 1 . 3.1 As a country composed of numerous islands , the Philippines relies heavily on bridges for connectivity. The Philippine bridges have not yet met the demands of economic and social development.

2 . 1 . 3 . 2 China is willing to share with the Philippines its experiences in bridge construction to enhance the bilateral cooperation in this field and meet the Philippines' demands on bridges brought by economic development.

2.1.3.3 Both sides agree to encourage enterprises to participate in the following priorities under bridge cooperation, subject to agreement by both sides :

( 1) Construction of five bridges across Pasig-Marikina River and Manggahan Floodway , including North South Harbor Bridge , Palanca -Villegas Bridge , Beata-F Y . Manalo Bridge , Blumentritt­ Antipolo Bridge , and East Bank-West Bank Bridge 1 , and other priority bridge projects.

(2) Conduct of feasibility studies of priority bridges, e.g., Panay­ Guimaras-Negros Island Bridge, Negros-Cebu Link Bridge , Cebu­ Bohol Link Bridge , Leyte-Surigao Link Bridge , and Luzon-Samar Bridge , and other priority inter-island bridges.

2.1.4 Ferries

2.1.4.1 Pasig River Ferry System serves as an important transportation mode connecting different cities in Metro Manila. However , pollution and heavy siltation of the River have seriously affected its navigability and discouraged commuters from completely patronizing the Pasig River Ferry System resulting in failure of the ferry system to completely and effectively achieve its objective to supplement/complement the other modes of transport and somehow reduce traffic congestion in Metro Manila. In addition, the stations/terminal facilities and the respective hinterland infrastructure access are pronouncedly in need of upgrading, rehabilitation and/or modernization/redevelopment.

2.1. 4 . 2 Both sides agree that there is huge potential for bilateral cooperation in the revival, rehabilitation, upgrading and strengthening of the Pasig River Ferry System.

2.1.4.3 Both sides agree to encourage enterprises to participate in the following priorities under ferry transport system development cooperation:

(1) Fleet acquisition , waterway pollution control, and communication services, among others.

(2) Route development, transportation engineering and management, promotion of safe navigation , rehabilitation and upgrading of the stations/terminal facilities, and integration of ferry to inter-modal transport system, among others .

2. 1 . 5 Airports

2 . 1.5.1 There are 85 national airports in the Philippines, composed of 11 International Airports , 14 Principal Class 1 Airports, 19 Principal Class 2 Airports, and 41 Community Airports . Some airports, particularly those with regular commercial airline services , require upgrading and/or rehabilitation to cope with the increasing demand. The existing capacities are unable to meet the demand for both passenger and freight transportation.

2 . 1 . 5.2 Both sides agree to encourage enterprises to participate in the construction or development of airports in various regions.

2.2 Agriculture

Both sides agree upon irrigation and fish ports as main areas for agriculture cooperation.

2. 2 . 1 Irrigation

2.2. 1 . 1 At present, the existing irrigation capacities have yet to meet the increasing demand for irrigation.

2.2.1.2 Both sides agree that there is huge potential for bilateral cooperation in irrigation.

2.2.1.3 Both sides agree to encourage enterprises to participate in the implementation of priority irrigation projects, e. g . , Ilocos Norte Irrigation Project , Phase II, subject to agreement by both sides.

2. 2 . 2 Fish Ports

2.2.2.1 Fish ports are critical facilities for fishery development. At present, the number and capacity of fishing vessels, and the number and handling capacity of fish ports are limited, and unable to meet the current demand . These spell the need for upgrading and/or rehabilitation of fishery post-harvest infrastructure and facilities of the fish ports and fishing vessel fleet.

2.2.2.2 Both sides agree that there is huge potential for bilateral cooperation in fish port construction, upgrading, and rehabilitation.

2.2. 2 . 3 Both sides agree to encourage enterprises to participate in the implementation of priority fish port development projects.

2.3 Power

2. 3 . 1 The total installed capacity nationwide in the Philippines is 23,687MW in 2018. While new capacities were added to the country's supply base in 2017, more capacities will be needed to meet increasing electricity demand.

2 . 3.2 Both sides agree that there is huge potential for bilateral cooperation in the power sector.

2.3.3 Both sides agree to encourage enterprises to participate in the conduct of feasibility studies of priority power-related projects,

2.3.4 Both sides agree to encourage enterprises to participate in the public bidding of power-related projects , as well as in the competitive generation market of the Philippines, e.g. Rehabilitation of all Agus-Pulangi Hydroelectric Plant Units, among others, subject to agreement of both sides .

2.4 Water Resources Management

2.4.1 Watershed management approach is very important in terms of sustaining soil productivity, water efficiency, disaster-climate resilience.

2.4.2 Both sides agree that there is huge potential for bilateral cooperation in the areas of flood control, water impounding, river dredging and management, among others.

2.4.3 Both sides agree to encourage enterprises to participate in the following priorities under watershed management cooperation:

(1) Implementation of flood control, water impounding, river dredging and management projects, e.g., Ambal-Simuay River and Rio Grande de Mindanao River Flood Control Projects, Bohol Northeast Basin Multipurpose Project, Tumauini River Multipurpose Project , Panay River Basin Integrated Development Project, New Centennial Water Source-Kaliwa Dam Project, among others, subject to agreement by both sides.

(2) Conduct of feasibility studies of priority projects related to flood control, water impounding, river dredging and management project s .

2.5 ICT/ Telecommunications

2.5.1 The Philippines has expanded its telecommunications infrastructure in recent years. The quality of the domestic network is relatively high. There are well-functioned platforms for fixed lines, mobile phones, cable TV, wireless TV and radio, and small aperture terminal (VSAT) systems.

2.5.2 Both sides agree that there is huge potential for bilateral cooperation in telecommunications .

2.5.3 Both sides agree to encourage enterprises to participate in the following priorities under telecommunications cooperation:

(1) Telecommunications information technology projects jointly establish a big data system, and promote new philosophy behind city development such as intelligent city and safe city, among others.

(2) Strengthening technical cooperation and exchanges on telecommunications.

Chapter III - Cooperation Modes

On the basis of existing infrastructure cooperation, both sides agree to explore new cooperation modes and expand cooperation scope. Both sides will integrate with the Philippine Development Plan 2017- 2022 and Long -Term Vision 2040, encourage their institutions and enterprises to participate in infrastructure cooperation projects and deepen bilateral infrastructure cooperation.

3.1 Project Contracting

China is willing to share with the Philippines its experience and resources in investment and financing, consultation and design, engineering technology, contracting construction, project management, project financing, among others. Both sides agree to adopt effective measures to further promote in-depth cooperation in project contracting and support the economic construction and social development of the Philippines, in a bid to make project contracting an important growing area to promote economic and trade cooperation between the two countries. Moreover, both sides agree to cooperate by different means of procurement modes [e.g. Design and Build; Procurement, Construction; Engineering, Procurement, Construction (EPC), EPC and Commissioning (Turnkey) and EPC and Financing, among others, subject to existing laws, rules and regulations of both countries.

3.2 Public-Private Partnership ( PPP )

PPP has become an important operation mode of major infrastructure projects in global market. Both sides are willing to share and learn from each other's experience in PPP projects, and formulate relevant policies to encourage the enterprises' participation in PPP projects, in a bid to improve their capabilities in infrastructure cooperation by means of PPP.

3.3 Direct Investment

Acknowledging the importance of direct investment in implementing infrastructure projects, both sides are willing to encourage enterprises to expand their direct investment scale in the Philippines, and take various effective measures to encourage private sectors' investment in infrastructure. Both sides agree upon, in accordance with both countries' existing laws on promoting and protecting outbound investment and their respective international obligations, the adoption of investment facilitation measures and formulations for better guidance.

3.4 Technical Cooperation

Both sides agree that the technical cooperation is a traditional cooperation area for the two countries. In the wake of the rapid economic development of the Philippines, there is a great potential for bilateral cooperation in this area. China is willing to share its experience in planning, preliminary and pre-investment studies, and operation and management of large infrastructure projects with the Philippines. Enterprises of both sides will be encouraged to develop technical cooperation on infrastructure construction through the development of industrial master plans and project feasibility studies, among others.

Chapter IV Guarantee Measures

4.1 Organization

4.1.1 Both sides agree to utilize existing organizations and coordination mechanisms to improve the investment environment, implement investment policies, and strengthen unified coordination, planning and guidance on infrastructure project cooperation, in a bid to promote the implementation of the Program, subject to existing laws, rules and regulations of both countries .

4.1.2 Both sides agree that it is the responsibility of Philippines­ China Joint Economic Cooperation Working Group (ECWG) to guide and encourage the enterprises' participation in infrastructure cooperation in the Philippines, formulate an indicative rolling list of infrastructure cooperation projects, and oversee the implementation of major cooperation projects, and for both sides to assign focals who will be in charge of coordinating the undertakings of the Working Group.

4.2 Financing

Capital is an important guarantee of infrastructure construction. Both sides are committed to improve the financing guarantee system for infrastructure cooperation to provide financial support for key cooperation projects agreed upon by both sides, subject to existing laws, rules and regulations of both countries

4.2.1 Both sides underscore the importance of expanding bilateral direct investment scale, and are committed to adopt effective measures to guide and encourage enterprises to make direct investment in the Philippine infrastructure projects.

4.2.2 Both sides are willing to utilize concessional loans, export credit and other means of financing to provide financial support for infrastructure projects with economic and social benefits in the Philippines, and encourage financial institutions to provide financing facilities for Chinese enterprises investing in the Philippines in the form of project financing , syndicated loans, and mixed loans.

4.2.3 Both sides will actively explore new means of financing and take advantage of the financial market of both countries to establish effective means of financing for infrastructure cooperation on the basis of market-oriented financing means . ·

4.2.4 Both sides underscore the importance of sound financial risk management in ensuring smooth infrastructure cooperation. Both sides shall encourage their enterprises to use such insurances as export credit insurance to insure enterprises against risks and financial institutions for loan recovery. The Philippines will consider extending sovereign guarantee for the financing of key infrastructure cooperation projects , as applicable.

4.3 Policy Support

4.3.1 In order to guarantee the effective implementation of the cooperation projects agreed upon in the Program, both sides agree to improve regulations related to infrastructure investment, and create a more favorable investment environment, in a bid to encourage and promote investment cooperation and protect the legitimate rights and interests of both sides, subject to existing laws, rules and regulations of both countries.

4.3.2 Both sides agree to take measures to enable investment facilitation, and to protect investors' interests, property and safety, subject to existing laws , rules and regulations of both countries.

4 . 3 . 3 The Philippines agrees to take responsibility for land expropriation and resettlement for cooperation projects agreed upon under the Program , to facilitate the implementation of such projects, subject to existing laws, rules and regulations of both countries.

4 . 3.4 Both sides agree to provide necessary assistance, and streamline the exit and entry procedures for equipment and personnel involved in the implementation of the cooperation projects agreed upon in the Program, subject to existing laws, rules and regulations of both countries.

4. 3 . 5 Both sides agree to implement and improve bilateral tax treaties to avoid double taxation, enhance customs regime, strengthen the tax administration system , and build a sound levy and payment relationship, subject to existing laws, rules and regulations of both countries.

4.4 Monitoring and Evaluation

4. 4 . 1 Both sides agree to assign focals under the ECWG to be in­ charge of direct communication to ensure the timely delivery of relevant information to the party concerned.

4. 4 . 2 Both sides agree to jointly monitor activities included in the Program in an appropriate manner, to ensure that the objectives of the Program are met.

4.4.3 Both sides agree to utilize the existing mechanism to exchange information gained by both countries in a manner that can be easily accessed, referred to, and built on by both sides with the view to increasing the knowledge base of the countries even after the duration of the Program.

4.5 Confidentiality Clause

Both sides are required to maintain the confidentiality of information which shall pertain to those (i) by its nature confidential; (ii) designated by the countries as such; and (iii) that they know or ought reasonable to know is confidential. Disclosure of any confidential information may only be made upon consent of the country to whom the confidential information belongs or pertains to.

4;6 Amendment

Any modification, alteration, addition, or changes in the Program shall be in writing and mutually agreed upon by the two Governments.

4.7 Commencement and Termination

4 . 7.1 This Program shall take effect upon signing by the two countries.

4 . 7.2 Each country reserves the right to terminate the Program at any stage by giving written notice of its intention to terminate to the other side. In the event that written notice of termination is given, the Program will terminate three months after the date that the other side receives the notice of the intention to terminate.

Chapter V Supplementary Articles

5.1 Both sides agree to actively promote cooperation in key areas and projects agreed upon in the Program, which shall not exclude cooperation on other projects as are mutually agreed and complementary to the aforesaid in deepening bilateral cooperation.

5.2 Both sides agree to create an open, fair and just investment environment for the cooperation projects, and guarantee reciprocal reasonable or national treatment.

5.3 Expiration or termination of the Program will not affect the validity of the ongoing cooperation projects .

5.4 Before the expiry of the Program , both sides shall jointly evaluate the implementation of the projects and agree upon whether to renew these according to the evaluation results.

Signed on November 20, 2018 in Manila, the Philippines, the Program is prepared in duplicate, in the English and Chinese languages, both texts being equally authentic .

Entry into Force: November 20, 2018