The Philippine government has signed a commercial contract worth 2.8 billion U.S. dollars with Chinese contractors to build the "fastest and longest railway" in the country that connects southern Luzon provinces, China's Ambassador to the Philippines Huang Xilian said in a statement on Tuesday.

Philippine Transportation Secretary Arthur Tugade signed on Monday the first package of Philippine National Railway South Long Haul Project (PNR Bicol) with a joint venture consisting of China Railway Group Ltd., China Railway No.3 Engineering Group Co. Ltd., and China Railway Engineering Consulting Group Co. Ltd..

The first 380 km stretch of the PNR Bicol project, spanning Calamba town in Laguna province to Legazpi town in Albay province, is one of the flagship projects under the Build, Build, Build program launched by Philippine President Rodrigo Duterte to promote infrastructure development in the Southeast Asian country.

"Once fully operational, it will cut travel time between Metro Manila and the Bicol region from the current 12 hours by road to as short as four hours," the Department of Transportation said in a statement, adding that it could serve up to 14.6 million passengers per year.

The statement said the PNR Bicol passenger trains will run at a speed of up to 160 km per hour, while freight trains will run at 100 km per hour.

The project is "another milestone for China-Philippine cooperation and friendship," said the Chinese ambassador, adding the cooperation is the "highest-funded" government-to-government project between the two countries.

The project is also expected to create more than 10,000 direct construction jobs each year and hundreds of thousands of jobs in related areas by driving the economic growth along the line, Huang said.