Walang Ku-Corrupt!

(Speech by Sen. Panfilo M. Lacson before the “Wala nga bang Ku-Corrupt?” forum delivered February 28, 2008 at the UP NCPAG Assembly Hall, University of the Philippines, Diliman, Quezon City)


Masyadong mahaba ang listahan ng corruption I will enumerate. As you see, the title is Walang kukurap. I’ll tell you later why. I would like to thank you for this opportunity to give my two-cents worth on today’s most difficult challenges – that of poverty and the presence of unmitigated corruption.

That the peso is relatively stronger is a fact. That the economic indicators show good numbers is another fact.

But these same numbers are still leaving a lot of us out.

Everyday, public transport drivers, factory workers, vegetable farmers and even office workers complain that they do not earn enough to meet even their most basic needs.

According to the novel, “God’s Bits of Wood”, real misfortune is not just a matter of being hungry and thirsty; it is a matter of knowing that there are people who want you to be hungry and thirsty.

The quote is about how people in power abuse their position at the expense of the voiceless in society.

The novel is set in Africa, but it might as well have been describing the Filipino’s way of life for the past seven years.

If we plan to eliminate poverty, we must pull the plug on corruption now.

Corruption has become an institution to such an extent that we no longer talk about the presence of greed but mere moderation of greed.

Therefore, if we must respond, we have to be consistent with the larger obligation to instill integrity even in our daily lives.

Much of our power to make change grows out of the power of our examples.

In 1999, when I was appointed Chief of the Philippine National Police, I inherited an agency that stood for good values and integrity in name only. Nobody respected us and we were only followed because we had guns and therefore we had power.

It would have been easier for me to simply not rock the boat. Sabi nga nila, “ Dating gawi lang at ayos na ang butu-buto.”

But I stuck to my principle – What is right must be kept right. What is wrong must be set right.

The results were good and very encouraging. Corruption among my policemen was at its lowest during that time. My policemen were disciplined, even became physically fit to perform their duties and mission of keeping the peace and serving our people.

The formula was simple enough – Leadership by example. I was not stealing from the funds of the PNP. I was not accepting bribe money from jueteng and other illegal activities.

Now, in answer to your forum’s theme, Wala nga bang ku-corrupt, let me help in my own humble way, to make it happen. Para siguradong walang ku-corrupt mula ngayon, let me provide you with a long list of unbridled corrupt acts committed against the taxpayers of this country and all the rest of us by Mrs. and Mr. Gloria Macapagal-Arroyo and their cohorts.

You have to bear with me. The list is long and nauseating.

Number 1: Barely a week after GMA took power from Joseph Ejercito Estrada and after promising to be a “good” president, her justice secretary named Hernando Perez signed an opinion that allowed sovereign guarantee over a power plant rehabilitation contract that the government she succeeded refused to grant. IMPSA got its sovereign guarantee in exchange for 14 million dollars in commission. The monies went through circuitous global routes, from Uruguay to the Cayman Islands, and 2 million dollars of the loot later went to Hong Kong, thence Singapore, finally Switzerland.

I myself tried to re-trace the route, and my sleuthing went as far as a branch of a very private Coutts Bank in Hong Kong. Months later, no less than the Swiss federal authorities discovered that from Coutts Bank it went to EFG, another private bank in Singapore, and thence to their mountain hide-away safes. Split in the name of the wife of the justice secretary and the brother-in-law.

Did the “good” leader do anything? Oo naman. She merely accepted the resignation of that extremely powerful member of her official family “with regrets” two years after. There is a case languishing in the Ombudsman’s office up to now. Languishing, despite what lawyers would call “an open and shut case”, or are we to say the Swiss federal authorities just fabricated the paper trail? Would anybody ever believe that the Swiss government is just like our own Commission on Elections?

That crime of corruption happened seven years and two months ago. And all we know is what happened to the 2 million dollars. Whatever happened to the rest of the 14 million dollar loot? Your guess is as good as mine.

Number 2: The new “good” administration discovered that a telecommunications expert named Pacifico Marcelo was granted license to operate by the National Telecommunications Commission during the previous so-called “bad” administration. Seeing big business opportunities, the new “good” leader personally met with the licensee and, behind the curtains that surround a portion of the walls of a hall in Malacanang, asked that he turn over 55% of the corporation to her assigns.

He refused. He was hounded. In the Senate itself, the minions of that “good” leader harassed him no end. He had to flee to the United States for fear of his life.

Then, a whistleblower, a close friend and classmate of the “good” leader in an exclusive and expensive school, resigned in disgust. Pressured, she refused to talk before the Senate Blue Ribbon Committee. She died a few years ago, bringing with her to the grave the secrets that she knew.

Number 3: The previous administration rushed a wide avenue that would run parallel to Roxas Boulevard, in order to lighten up the traffic to and from the Manila International Airport. The highway, already almost completed, was negotiated for a price of 650 million pesos. Now, when the administrators of the “good” leader took over, they presided over the completion of the boulevard, but the price had ballooned to 1.1 billion pesos. Almost double the original cost because of “change orders” and landscaping.

The “good” leader inaugurated the avenue, on her birthday, and named it after her father. A short bridge span was named after her grandfather, another after her grandmother. The Diosdado Macapagal Boulevard, 2.2 kilometers long at half a billion pesos per kilometer, is now known as the most expensive boulevard in the universe.

Number 4: In the second-half of the year 2003, I discovered a cache of documents, originals as well as photocopies, pointing to a huge money-laundering scheme by a certain Jose Pidal, whose signature on checks, even to a cross-eyed person, was uncannily similar to the strokes of the signature of one Jose Miguel Arroyo.

The person who provided these to me was a certain Udong Mahusay, confidante and utusan of the First Gentleman and a lady named Vicky Toh, who was to stand as my witness against Jose Miguel Arroyo’s web of corruption. Many things happened thereafter. Someone else stood up to claim that he was the real Jose Pidal. He is now a congressman representing a district in Negros Occidental, paying P800 in income tax has indicated in his SALN is worth P200 million. Mike Defensor shanghaied Udong and flew him by presidential helicopter to the waiting arms of a highly-relieved Malacañang. And all sorts of lies, all sorts of cover-ups, by officials and agencies of government thereafter transpired.

Number 5: Running for election in 2004, the “good” president met with election operators and Comelec officials in her own house in Quezon City, a few hills away from where I speak now. Earlier she appointed as commissioner a known election operator of ill repute. But she needed money, tons and tons of it, to ensure that the election operations that would make her “win” could be paid. Apart from the “usual” jueteng sources, and apart from funds cleverly intersticed within a re-enacted budget, her Pidal tapped the genius of one Joc-Joc Bolante, officially Undersecretary for finance and administration at the Department of Agriculture, unofficially, its de facto chief executive officer. This brings us to...

Number 6: Joc-joc perfected the science of getting favored suppliers to produce a concoction of water and urea, at 9 parts to 1, 9 parts water, 1 part fertilizer, in bottled form, overpriced these 15 to 1, and had these distributed as liquid fertilizer to congressmen and governors all over the land, including congressmen from Makati, Navotas, Quezon City, Parañaque, Cebu City, Bacolod City, and other urban sprawls where no agricultural produce thrive. The Commission on Audit unearthed 729 million pesos in such patently illegal disbursements. What lies beneath the bureaucratic maze is estimated at another billion pesos or more.

The Senate investigated. Joc-joc refused to appear. Later, he simply flew to the United States, disgraced in exile. His immediate superior, Secretary Luis “Cito” Lorenzo, who did not know what Joc-joc hit him with, now lives in quiet exile in Canada and elsewhere, wondering when and how he could piece together the tattered pieces of his innocent being.

Number 7: How can we forget Hello Garci, the taped conversations that clearly showed how the “good” leader conspired with an election commissioner, using as instruments in cheating even those who should otherwise be presumed as “officers and gentlemen” in the military and police. Some other “officers and gentlemen” were used yet again to abscond and keep one Sgt. Vidal Doble, who tapped the phones right inside Camp Aguinaldo’s intelligence command.

Unable to deny a voice that is singularly and uniquely hers, she pleads “I am sorry.” But when articles of impeachment are filed against her in Congress, she uses all the powers and perks at her command to buy off the representatives of the Filipino people, in order to hide truth and cover up for guilt most bad and obvious. Acting as cash register to the release of pork and perks was the then Secretary of Budget and Management, one Romulo Neri, who would later metamorphose into the country’s chief economic planning agency, with responsibility to review all foreign-assisted projects.

Having successfully thwarted two impeachment attempts by the tried-and-tested method of lying through spinmasters, plus spreading the stolen gravy to legislators, local government officials and the uniformed generals, she segued into yet another election. Having little else but lemons and recycled trapos to carry her electoral banners, the “good” leader needed tons of money once more for the “usual operations”. Which in this country means conscripting the Comelec in service of cheating.

Let me at this point back track into the year 2004, when, flush with what nobody believes an “electoral victory”, she sallied forth to China, that once poor neighboring Communist country which then maintained a bulging reserve of more than 2 trillion dollars. Willing to spread goodwill and promote its economic interests, this country has been winning new friends in Africa, South America and Asia by granting official development assistance. Poor Philippines, which claims islands and waters named Spratlys China likewise covets, was an easy target. Its soft state, presided over by this “good” leader, later found the foreign country’s lending binge a magnet for all kinds of deals.

I shall no longer belabor you with the details of this scandal most larcenous. Suffice to say, I have now in my possession a copy of “An Agreement for Joint Marine Seismic Undertaking in Certain Areas in the South China Sea By and Between China National Offshore Oil Corporation representing the government of China and the Philippine National Oil Company, representing the government of the Republic of the Philippines.” I plan to deliver a privilege speech next week on this document and possibly accuse that good leader of treason.

Eto na marahil ang pinaka sukdulan sa kasamaan na maaring magawa ng isang lider sa kanyang bansa – ang isuko ang ating territorial sovereignty and integrity, kapalit ng bilyon bilyong dolyar in loan package mula sa bansang China para mapondohan ang mga proyekto upang may makukurakot naman silang mag-asawa na bilyon bilyong piso mula sa uutangin ng ating pamahalaan.

While I will now stop the count, you and I know the counting does not stop.

At any rate, from the time I exposed the onerous ZTE-NBN supply contract on the floor of the Senate last August, which triggered the investigation now unfolding right before us as you have seen most of the gory details unmasked through media. Its details are enough to fill an entire case anthology of governance most bad, and corruption most greedy, worthy of being learned and re-learned by future students of the National College of Public Administration and Governance.

The elements you have seen in my previous enumeration of case precedents of corruption under this “good” leader are present in the ZTE-NBN deal, a telenovela whose story line has become all too familiar during these seven years and two months of unparalleled greed. There are the usual “agents”, in this case the chairman of commissioners for elections, along with his “expert” technical operators, known as the Gang of Four who the public has yet to see or hear from. Of course there are bumbling officials who simply do as they are told, because everyone knows the power behind the deal. And there is an intelligent a brilliant official surnamed Neri who knew that what he was forced to sign agreement with, was most scandalous, most immoral, most “evil” to borrow his own adjective. And there were the usual bribes, the usual attempt to exile, and now infamous attempt to kidnap a key witness.

So where do we go from here?

“Wala nga bang ku-corrupt?” you ask.

The premier institution for public administration of the premier university of high learning has, through its years of dedicated existence, come up with volume upon volume of method and manner by which governments and leaders can stop corruption. From avoiding too much discretion by public officers, to systemic means of simplifying transaction procedures, to the strictures of open and transparent public bidding, to E-procurement, even to increasing the penalties for graft.

All these are good, but only in the hands of a truly “good” leader.

For a “dysfunctional procurement system” as Jun Lozada describes it, thrives only when functional systems are distorted by the wielders of power to favor their personal selfish interests – their immoderate greed.

But I have to disagree with this distinction made between what is moderate what is excessive. We cannot build a body politic by demarcating permissible zones of crime and corruption.

We are where we are now mired in the deep shit of corruption, because in the past and up to the present, we as a people tolerated “small” graft, be it the “kotong” of cops, or the “padulas” for the clerks in regulatory and licensing agencies.

Now we are appalled because the commissions exceed the fair price of a project, in the case of the ZTE-NBN deal, how 132 million dollars in work value ballooned to 329.5 million dollars, an overprice of almost 200 million dollars, or 8.2 billion pesos in present value.

Now, what is the difference between upping 650 million pesos into 1.1 billion for the Diosdado Macapagal Boulevard, months after this “good” leader took over, as against the ZTE-NBN deal, six years thereafter? Only the numbers and the zeros differ, but the greed can hardly qualify in all these cases, as “moderate”.

So how do we excise the “kotong”, the “padulas”, the “lagay” as lower members of the anatomy of corruption? By proper systems which “evil geniuses” in the mold of Joc-Joc and BIR and Customs agents will always find ways to circumvent?

How do we compel public works engineers to build roads and bridges that will stand the test of time and the elements, if 40% must perforce go to the district leader, the congressman, or the provincial leader, the governor?

This SOP of corruption is my principal reason for foregoing my 200 million peso-a-year “pork barrel fund”. Every legislator, whether guilty of exacting commissions or not, has become suspect. I refuse even to be a suspect!

In the final analysis, ladies and gentlemen, students and the Hope of the Motherland, the fight against corruption needs a North Star to follow. It cannot be a bishop or a cardinal or any religious leader, however wise his admonitions of morality. It cannot be anyone else than the head of agency in the executive department, or the local elected executive in city or province.

For a leader cannot compel obedience to the right, if he or she chooses what is wrong. One can dissemble and pretend to be “good” only up to a certain point. The truth will always out.

Leaders, or those who hope to be, will always come up with so-called visions of good governance and sound economic policy. You and I can discuss these at some future time; you and I already have models for sustained growth and social justice stored in our minds. We can refine them; we can revise them as time and the environment compel.

But public morals are an immutable value. They cannot be cheapened by qualifying zones of permissibility. They cannot be buried by the permissibility of a tainted leader. They cannot be forever hidden by a corrupted justice system.

Wala na bang ku-corrupt, you ask. I now ask, plead if you will. Namulat na rin lang ang ating mga mata sa talamak at walang kabusugang pagkagahaman ng mga namumuno sa atin, huwag na tayong kukurap. Magbantay, kumilos, magkaisa, at sama-sama tayong mag-protesta. Ibigay ang ating mga tinig, at kung kinakailangan, ang ating buhay para wakasan ang katiwalian na ang pamamaraan at halagang nakapaloob dito ay hindi pa natin nasaksihan sa buong buhay nating lahat.

Let me close with a simple story:

Many years ago, there was this poor couple with eight children. The father was a driver; the mother augmented the husband’s meager income by selling dry goods in the town’s public market.

Raising eight children and educating them was backbreaking, but through honest toil and plenty of prayers, they managed to get all eight through college.

They were a religious couple. Never a Sunday passed that they did not attend Mass in the town church. And they instilled the same moral values they practiced among their brood of eight.

But those were kinder times, when population was less and public schools dispensed good education, when public health services were adequate, when food and nutrition was affordable.

We are into infinitely more difficult times. The globe has become smaller because of science and technology, but the gap between the poor and the rich has become wider. As it is with nations, so it has been with our people. For how can a poor couple with eight children manage in this day and age to grow them to become professionals, let alone to stave them off starvation?

We can blame failed policies for this state of things, and I agree. But we must similarly fault the practice, not policy --- which is corruption --- that has denied government of the resources with which to intervene and narrow that gap in service, that gap in equity.

By the way, I am the fourth child of that couple, and I hope that together, we could bring back those kinder times.

Thank you and good day.

*****

Lacson at Senate hearing on ZTE Mess

As video cameras continued to roll, Sen. Panfilo M. Lacson poses a question to engineer Rodolfo Noel Lozada Jr., a key witness in the $329.48-million ZTE broadband deal scandal, during the Senate hearing on the matter last Feb. 26. Lacson "introduced" new witness Dante Madriaga later during the hearing.

Lacson Guests at Iloilo Symposium for Public Servants

Sen. Panfilo M. Lacson stresses before public servants, including police officers and personnel, the need for true public service in government during a regional symposium on public servants as "Agents of Change" in Iloilo City. Lacson, a former chief of the Philippine National Police, posed with police personnel for a photo after delivering his message.

Corrupt-Free 2010

PHOTO: Sen. Panfilo M. Lacson receives an award from Mr. Henry Kho,
president of the Rotary Club of Downtown Manila (District 3810),
at the Century Park Hotel in Manila last Feb. 15.

(Speech by Sen. Panfilo M. Lacson before the Rotary Club of Downtown Manila delivered February 15, 2008 at the Corregidor Function Room, Century Park Hotel, Manila)

Good evening.

Once a Japanese ambassador told me there are 3 most common lies on earth. No. 1 lie, is when an American tenant tells his landlord, the check is in the mail. It is not to be believed. No. 2 lie, when a Japanese lover tells you that he is more romantic than a Frenchman, don’t believe him. And the 3rd most common lie is when a politician tells you he’s about to deliver a short speech. Ladies and gentlemen, my fellow Rotarians, don’t worry. This is going to be a short speech.

Let me first thank president Henry for giving me the opportunity to be here and share my views on corruption, poverty and what 2010 should mean for all of us.

Fellow Rotarians, as a public servant who has dedicated all of 37 years of my life to serving others, I know that government’s efforts to provide access to basic services for this nation’s poor will be in vain if we continue to live in an unjust society and be led by an unjust government.

Listen to the president’s speeches nowadays. It is a long litany of successes: a strong peso, rising GNP, increased job creation and stable consumer prices all equal to a progressive economy. But progress for whom?

Certainly not for a jeepney driver or a pedicab driver or a factory worker whose family subsists on rice and instant noodles every day of their miserable lives.

Certainly not for a labandera who cannot even afford to buy the needed medicine if she or anyone in her family gets sick.

Every time President Arroyo steps on that podium and talks of economic successes, she is talking only to a select few and, I’m sure, is being applauded only by the same select few.

When did prosperity become exclusive?

Before, ambition was enough to get you anywhere and everywhere. Ngayon, abot kaya ang mga pangarap kung kaibigan ka ng Malacañang.

This is why there should be a keen interest this early in how 2010 will unfold.

The next administration must ensure an economic development that is shared by all and benefits every Filipino.

But promoting fairness is easier said than done.

In fact, what these recent weeks have taught us is that there are individuals in government who are willing to lie, cheat and even abduct to protect what they already have.

I am talking about corruption and how it evolved from a mere bad memory of our colonial past to the profitable business of today.

So profitable that moderating some powerful people’s greed doesn’t seem to be acceptable as a compromise anymore. Worse, to some people, it is no longer considered corruption unless it is a $200-million overprice in a $329-million deal.

It is important then that before we can talk about reducing poverty, we must first focus on corruption.

Corruption as the unchecked use of power for private gain has been the only stumbling block in alleviating poverty.

It is time to put a stop to this corrupt government of the few, by the few and for only the few.

It is time to put an end to corrupt practices and grant equal opportunities to all.

So what needs to be done?

It is time to revert to the concept of public service with discipline. It is time for government to be afraid of its people, not the people being afraid of their government. It is time for us in government to act like real public servants. Yes, the people may not be our masters but definitely we are their servants.

Seven years ago, in her first SONA, Mrs. Arroyo promised to rid this nation of corruption and to serve us selflessly. That should have been her legacy:

But barely days into her post, the Arroyo government signed a power project contract that had previously been refused by her predecessor, former President Estrada, as too anomalous and debilitating to the Filipino interest.

I refer to the 470-million US dollar power contract granted to the Argentinean company IMPSA, which earned her and her key players, among them former Sec. Hernando Perez, a 14-million US dollar payoff.

I personally tracked Mr. Perez’s two-million US dollar bribe to a Hong Kong bank whose account is under the name of one of Mrs. Arroyo’s operatives, Ernest Escaler.

Mrs. Arroyo is not above extorting from foreign corporations. Recorded conversations between German firm Fraport and her aide Gloria Tan Climaco can attest to her attempt to extort from the firm 20-million US dollars in exchange for legal favors. Fraport partly owns the Philippine International Air Terminals Corporation (Piatco), which won the bid to construct the overpriced NAIA-3 terminal project.

She has also been busy on the home front.

By buying the support and silence of congressmen and other elected officials with 500,000 pesos in bribe money, she managed to thwart moves to impeach her.

Mrs. Arroyo is also busy inventing more money-making schemes for her and her associates.

In 2004, the implementation of a fertilizer fund that saw its 728-million pesos budgeted to help small farmers increase their profits go to an intricate scheme of profit sharing: 25 percent for local government proponents, 25 percent for the so-called “runners,” 30 percent for politicians and 20 percent to suppliers – all of which are known allies of the Arroyos who, as we all remember, was running for the presidency and obviously needed the fund and support at the time.

Nothing is heard of the fertilizer fund scam because its main architect, then DA undersecretary Joc-Joc Bolante, is now in a US jail, conveniently out of reach to the Philippine authorities.

Conveniently out of sight and out of mind.

As what could have happened to Jun Lozada, a key witness to the 329-million dollar ZTE deal that siphoned funding from the urgent AFP and PNP housing and the Angat Dam projects to, once again, line the already overflowing-to-the-brim pockets of insatiably greedy Malacañang and even non-Malacañang officials.

Ladies and gentlemen of the Rotary of Downtown Manila, this is what corruption has done to us.

This is how corruption has carved out so much of the pie that could have gone to educating our children and building more hospitals for our poor.

And despite claims to the contrary by the present tenant of Malacañang, the problem of our country is government. Not the Filipino people but government. It is government that collects our taxes, it is government that spends our money, it is government that implements and enforces the rules of the land.

Yet, the solution can be found in, and must start from, the government. How? Through leadership by example. There is no other way I know.

I have said it many times before, and I will say it again. If you lead by example, everyone will follow. But if you do not practice what you preach, your subordinates will find no reason to follow your orders. I should know, I led by example when I headed the Philippine National Police. I never stole money from the funds of the PNP. I did not accept bribe money from gambling lords and other illegal activities.

In this sense, around the presidency should revolve our hopes for a secure future.

In it should rest the most crucial decisions on issues that will not only affect our past generation, but this one and the next.

Come 2010, we have the power to press the reset button and stop being what Bishop Ted Bacani calls as the “people of the lie.”

In 2010, we have the power to change how our life to how it should be, according to the great Filipino dream.

And what constitutes the great Filipino dream?

I believe it is not about owning fancy cars or large tracts of land or having large bank accounts, or even getting a Harvard diploma.

The Filipino dream simply means the opportunity to be what you want to be.

Let me end my speech with a short story.

Once, there was a brood of eight born to a family of modest means like most families are nowadays.

The father was a jeepney driver and the mother worked in a dry goods market. They never finished school but they worked hard, saved and managed to make all eight children finish college.

More than a college diploma, what their kids fondly remember is how their parents got them through life through honest work and determination, not the corrupt practices that we see today.

Ladies and gentlemen of the Rotary Club of Downtown Manila, I am the fourth child of that brood of eight and a proud product of the great Filipino dream.

Thank you for listening.

*****

Lacson Lights Candle for Jun Lozada during Senate Vigil

Sen. Panfilo M. Lacson joins members of civil society in lighting a candle for ZTE witness Rodolfo Noel Lozada Jr. during a vigil at the Senate in Pasay City (Feb. 6)

Lacson Pushes Senate Probe into Southrail Overpricing

Noting how many “urgent” projects ended up as excuses for corruption, Sen. Panfilo Lacson sought an investigation into the $70-million overprice in the Southrail project.

In Senate Resolution No. 302, Lacson said the investigation aims to strengthen the government’s procurement and anti-graft laws.

“Numerous anomalous procurement deals have become a common occurrence in this administration wherein government officials blatantly disregard the rule of law just to further their pecuniary interests,” he said.

The anomaly in the Southrail project came to fore last week, when engineer Rodolfo Noel Lozada Jr., a witness in the $329.5-million ZTE broadband mess, confirmed it. In his testimony, Lozada said some Palace officials were among the beneficiaries of the $70-million overprice in the Southrail project.

Lacson lamented such illegal transactions have only depleted the country’s already limited resources and had diverted much-needed funds from socially relevant projects.

“In light of recent events, it is evident that RA 9184 had become a toothless, if not useless, law in ensuring that the governmental procurement process is free from any irregularities, thus there is an urgent need to revise the provisions of the said law in order to make it more effective and efficient in preventing anomalies in the future,” he said.

“The deliberate actuations of government officials in conniving overpriced contracts manifest their grave disrespect for the provisions of the Anti-Graft and Corrupt Practices Act,” he added.

At present, the government is seeking to expedite the completion of eight priority railway projects. Most of these projects involve the interconnection, improvement, upgrading and extension of the existing mass railway systems such as the Light Rail Transit system, the Metro Rail Transit system, and the Northrail and Southrail systems.

The Philippine National Railway (PNR) said the Southrail project will be implemented in two phases. The first phase involves the rehabilitation and reconstruction of the existing 423 km railway line from Calamba, Laguna to Legazpi City, Albay. The second phase will cover the construction of a new 135 km. railway from Comun, Camalig, Albay to Matnog, Sorosogon;

The PNR reported that the estimated total cost of the Southrail project is $932.037 million, including $627.811 for Phase 1 and $304.226 million for Phase 2. PNR also said 95 percent of the project cost or $885.435 million will be funded through a loan from the Export-Import Bank of China.

In July 2007, the National Economic and Development Authority (NEDA) and the Ministry of Commerce of China signed a memorandum of understanding for the 542-km Southrail project. Under the agreement, both countries will create a Philippine-China Economic Joint Working Group to track and review the project’s performance.

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