Chinese embassy in the Philippines on Wednesday denied local reports saying that Chinese are backing off from a massive railway construction project in northern Philippines.

In a statement received by Xinhua, Peng Xiubin, spokesman of the embassy, said "such reports regarding the Northrail project do not tally with facts."

"The Chinese government, the Export and Import Bank of China and the Chinese embassy in the Philippines have consistently supported the project and will continue to push forward the project as always," Peng said.

Local reports on Tuesday quoted Edgardo Pamintuan, newly appointed North Luzon Railways Corp. (Northrail) chairman and chief executive officer, as saying that China has withdrawn its financial backing for the project and the Philippine authority now wants to look for new financiers.

But both the Chinese officials in Manila and officials from the Arroyo administration have denied the reports.

Meanwhile, Transportation and Communications Undersecretary for Rail Transport Guiling Mamondiong was quoted by local media Wednesday as saying that the Northrail project was still being funded by the China Export-Import Bank, and that the state-owned China National Machinery and Equipment Group (CNMEG) was still its contractor.

The project is expected to construct a modern 80-km railway linking Caloocan city of the Philippine capital of Metro Manila with Clark Freeport in Pampanga province.

China and the Philippines have signed an agreement to allow the Philippine side to avail of a 400 million US dollar loan from the Export-Import Bank of China to use in part of the project.

(Xinhua News Agency July 3, 2008)