MANILA – The Asian Development Bank (ADB) has warned countries against borrowing too much money from China for infrastructure projects without taking a closer look at the feasibility and viability of the transaction.
“If countries borrow too much for certain infrastructure without serious lookout in the economic viability, feasibility … it would cause more trouble in repayment,” ADB president Takehiko Nakao said in a report on “News To Go.”
Data from the National Economic Development Authority (NEDA) showed that China may fund P686.9 billion worth of infrastructure projects of the Philippine government.
Out of the 20 projects, seven will be funded through debts while 13 will be in the form of “grants.”
At present, NEDA said the Philippines and China signed only one loan agreement.
NEDA Secretary General Ernesto Pernia pointed out that the possibility is small that the Philippines will fall into a “debt trap” with China.
“It’s quite unlikely because the Philippines, our country has a low debt-to-GDP ratio – around 40 percent. ‘Yung foreign debt natin is only 23 percent of GDP …” Pernia said.
“It’s a very healthy debt situation, very manageable,” he said. (GMA News)
