MANILA – The Malacañang on Monday said the Philippines’ loan agreements with China go through scrutiny after Malaysian Prime Minister Mahathir Mohamad warned against dependence on foreign money for the implementation of various infrastructure projects.
“Of course, we will take his advice and the economic managers are evaluating all kinds of loans we are having with the Chinese government,” presidential spokesperson Salvador Panelo said at a news conference.
Mahathir, who was on a two-day official visit to Manila last week, had suggested limiting Chinese influence by urging countries like the Philippines to “grow within its own means.”
“If you have the capacity to borrow, it must be because we can repay. But when you borrow money which we cannot repay, you are endangering your own freedom,” the premier said in an interview with GMA resident analyst Richard Heydarian last Friday.
Panelo said Mahathir did not raise his concerns on the Chinese loans during his expanded bilateral meeting with President Rodrigo Duterte in Malacañang on March 7.
Since his stunning return to power in May last year, Mahathir’s government has suspended several major projects signed under the regime of former Prime Minister Najib Razak, in an effort to trim down the country’s one trillion ringgit ($251 billion) debt.
Opposition senator Leila de Lima had advised the Duterte administration to follow Malaysia’s lead to renegotiate, or possibly cancel, Chinese-backed projects to prevent the Philippines from going bankrupt.
She said that entering into loan agreements, especially those that are not obtained through competitive procurement, can put not only the country in dire debt and cripple the economy, but also undermine the Philippines’ sovereignty and national security.
Finance secretary Carlos Dominguez III has assured the public that the Philippines is not drowning in Chinese debt.
Dominguez said the government has been screening debt to China using the same standards as with any other loans.
Citing data from the Department’s of Finance’s International Finance Group, Dominguez said the loan from China accounts for only 0.11 percent of the country’s total debt.
The Duterte administration has so far finalized two loan agreements with China.
These are the $72.49-million for the Chico River Irrigation project and P18.724-billion New Centennial Water Source-Kaliwa Dam Project.
The Duterte administration, which came to power in 2016, aims to pour more than P8.2 trillion on its flagship infrastructure program “Build, Build, Build” until 2022 – building ports, airports, roads, railways, energy facilities, irrigation systems, and flood control facilities projects. (GMA News)
