CONTRARY to a claim by former president Benigno Aquino 3rd, the Philippines is not falling into China’s debt trap, the country’s chief economist said on Thursday.
In a press conference in Malacañang, Socioeconomic Planning Secretary Ernesto Pernia stressed that the Duterte administration has “not yet signed any loan agreement with China except oral commit-ments or some written memoranda of understanding.”
“We certainly are going to be very careful with our dealings in terms of project financing from the Chi-nese government,” said Pernia, who heads the National Economic and Development Authority (NEDA).
Pernia said the Philippine government has “clearing” procedures to ensure all Chinese-assisted pro-jects are undertaken by reputable firms.
“We have two clearing mechanisms: First on the China side, we have a clearing mechanism. We want the Chinese side to certify to us that the companies, private or state-owned enterprises that will be involved in projects, will be truly competent and with impeccable integrity. That’s on the Chinese side. So they can submit three names,” he said.
“And on the Philippine side, we also have a clearing mechanism to seek — to pick one of the three rec-ommendees from the Chinese side. So that is the best we can do to ensure that we are not going to get into problems,” Pernia added.
The NEDA chief issued the statement following former president Aquino’s statement, reminding the Duterte administration to be cautious with its loan agreements with China, emphasizing that the South China Sea arbitration victory should not be set aside.
“Sabi niya, manigurado kayo lahat ng mga project niyo economically feasible, kikita, makakabayad kayo ng utang, mapapatakbo niyo. Kung hindi utang ka lang nang utang tapos ‘pag ‘di mo nabayaran, paano?” Aquino said in a television interview.
(He told us to be certain that all our projects should be economically feasible, will earn, and will allow us to pay our debts. If not, we will end up borrowing and borrowing and if we are unable to pay, what will happen?)
Under Aquino in 2014, the Philippines filed an arbitration case against China contesting Beijing’s mas-sive claim on almost the entire South China Sea, believed to have rich deposits in oil and gas.
The tribunal ruled in favor of the Philippines in 2016, when Duterte was elected president.
Duterte has said he would only bring up the arbitral win at the proper time, as he pursued closer ties with China. He has frequently boasted of economic help from the communist country, touting the deals he signed to fund projects in the Philippines.
“We avoid violence and we avoid war because frankly, we cannot afford it and China cannot afford it also. It will only sow rift between the two of us,” Duterte has said.
“There is a time for me to ask about the arbitral ruling but it is not now. We have to go into the me-chanics. We have to have an agenda, the structure of the meeting and the way how to present the case to them first because we agreed to talk, to have a dialogue,” he added.