BEIJING – Ambassador to China Jose Santiago Sta. Romana said Wednesday he believes that the Philippines would not drown in its loans from China as the country already learned much from its experience on debts incurred by the Marcos regime.
“To say that we’re falling into a debt trap, we also have an experience already with that trap. And it was not with China, it was not with Japan, it was actually with Wall Street banks during the last years of the Marcos regime,” Sta. Romana said during an interview in Beijing.
“We had to pay with it default. We had to pay,” he added.
Foreign debt under Marcos ballooned from $30 million in 1962 to P28.3 billion in 1986, according to GMA resident analyst Richard Heydarian.
He added that Filipino taxpayers would only finish paying the principal and interest in 2025.
On the other hand, Sta. Romana said the Philippines is being granted loans because other countries know that it has the capacity to pay.
“You cannot compare the Philippines to Sri Lanka, the Maldives, or even Pakistan. The Philippines has an investment grade,” he said.
“You know, international community views us as credit-worthy and that is why when we have these loans, they have no doubt that we will be able to pay,” he added.
He further debunked concerns on “overreliance” on China by citing that the Philippines’ loans from the Asian powerhouse are less than five percent of the country’s total foreign debt.
“Japan, we owe them double, it’s around nine percent… What we have is a diversified portfolio, loans from Japan, from ADB [Asian Development Bank], from World Bank and as well as from AIIB [Asian Infrastructure Investment Bank] and China.
The Philippine ambassador also said the country is just making the most out of the loan offers while it is qualified to do so.
“We’re trying to maximize because soon we will graduate from the ODA-qualified countries because we’re reaching the ranks of the middle-income economy, on the higher side, you know. Only the ones from the low-income are entitled to it,” he said.
Finance secretary Carlos Dominguez III had allayed fears on the supposed debt trap of China.
Chargé D’affaires Ad Interim Tan Qingsheng also reiterated recently that China has no ulterior motive in granting loans to the Philippines.
President Rodrigo Duterte is currently in Beijing to attend a high-level forum on China’s Belt and Road Initiative. (GMA News)
