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Chinese loans very limited share of Philippines' foreign debts

It is impossible for the Philippines to fall into the debt trap of China, according to the Chinese Foreign Ministry

Nov 29

18:21
2018

It is impossible for the Philippines to fall into the debt trap of China, according to the Chinese Foreign Ministry.

"China's loans only account for a very limited share of the Philippines' foreign debts. It's impossible for the Philippines to fall into the so-called "debt trap" due to these loans," Foreign Ministry Spokesperson Geng Shuang said Tuesday in a press briefing in Beijing.

He also said China has since financed relevant infrastructure projects at the Philippines' request, in line with the Duterte administration's "Build, Build, Build" program. "We believe the relevant projects will further improve the livelihood and boost economic growth of the Philippines, providing new impetus for its national development," Geng added.

Geng was responding to Finance Secretary Sonny Dominguez's statements on Monday slamming "uninformed" critics that asking help from China and Japan would not endanger the country of indebtedness to China.

"This is totally unfounded. The financing we availed of are soft loans at the lowest possible interest rates and the longest possible term arrangements," Dominguez said Monday.

He explained the estimated debt of the Philippines to the Chinese government by the end of 2018 will be about 0.65 percent of the Philippines' total debt from a current 0.11 project.

The finance chief added the Philippines' loans from China will only account for 4.5 percent of the country's total debt by the end of the Duterte administration and when most infrastructure projects have already been financed. Dominguez also said the Philippines will lead the projects in the pipeline, and the Chinese government will only get to make an offer on which projects it want to fund.

"So this is the way this administration, as ordered by President Duterte, is protecting the Philippines from projects that are unnecessary and are driven by agencies outside of the Philippines," Dominguez said.

The 29 deals signed between Manila and Beijing during Chinese President Xi Jinping's state visit to the Philippines include an infrastructure cooperation program, as well as cooperation agreements on infrastructure projects in Davao Region, and implementation accords for the feasibility studies of the Davao City Expressway Project and the Panay-Guimaras-Negros Island Bridges Project