|
THE
National Economic and Development Authority (Neda) is
concerned there could be negative effects from the
controversial broadband contract with the Chinese
government-picked supplier Zhong Xing Telecommunications
Equipment Co. Ltd. (ZTE) that may result in difficulties
obtaining official development assistance, concessional
loans and grants. Director General Augusto Santos
conceded that the recent events, including the
suspension of the national broadband network (NBN)
project, has been a concern for the Neda. He also
believes the deal and its issues should be discussed by
the President’s economic team.
“The
Philippines is now part of the global economy, and we
must pay attention to relations with the world,” Santos
said at the sidelines of the opening ceremonies of the
5th Development Policy Research Month in Makati City on
Monday. His reaction was sought two days after
Malacañang, through Trade Secretary Peter Favila,
announced the suspension of the NBN deal which was
supposed to be funded by a Chinese government loan of
$330 million and undertaken by ZTE Corp.
By way
of example of the relationships that not only include
financial sourcing, Santos referred to the continuous
employment of Filipinos abroad.
He added
that there are “no present risks” to the country’s
foreign relationships, particularly with
China,
and that ZTE is just one of the projects cooperatively
undertaken with China, referring to the 31 agriculture
projects with loans from China.
Santos
said the country would continue to receive loans from
China since the Philippines is a market for the latter.
The Neda
chief’s take on the possible fallout of the NBN
controversy follows fretful statements from Finance
Undersecretary Gil Beltran, who said the NBN would have
been useful in mending the inefficient tax-collection
system. Beltran told reporters the NBN would help
connect agencies whose databases are relevant to each
other and facilitate validation to weed out fraudulent
claims. However, the president and CEO of Chinatrust
bank, Joey Bermudez, told BusinessMirror the NBN was not
the right solution to revenue-collection problems.
“What is
needed to raise our tax-efficiency ratio is political
will, not a state-owned broadband network. The
inefficiency in tax collection is not due to poor
connectivity but collection leakages,” Bermudez said. He
added: “Besides, private telecom firms can provide
broadband capability to state agencies, if it is really
necessary.”
Meanwhile, one of
Santos’s predecessors, Ateneo de Manila University economist Prof.
Cielito Habito, said that in order to prevent future
problems similar to the ZTE deal, the Neda must take a
more aggressive stance when securing foreign loans to
prevent donor-driven decisions when it comes to
projects.
Habito
said that while it may be easier to get loans when a
country adopts a donor-driven approach, it could be a
distinct disadvantage when paying time is on hand since
they will be paid with the people’s money.
“Donor-driven initiatives is a traditional problem [but]
the one question [that the government must keep in mind]
is how these will benefit the country. We continue to
welcome ODA [but] we need to assert ourselves better,”
added Habito.
The
Ateneo economist also said government must stress the
importance of determining the ownership of the project
to meet the country’s priorities.
Habito
said the country also has bilateral loans from the
United Kingdom, Australia and Japan. He said that while
bilaterals with UK and Australia are similar to China’s,
which allows the foreign partner to determine the
supplier for a project, Japan is the only one that
allows international bidding.
He added
with
Japan
conducting an international bidding for projects, many
of the country’s bilaterals with them are even awarded
to Korean contractors or suppliers. “When securing a
loan, we should get the best value for our money.”
On the
other hand,
Santos said the Neda is doing its job in securing concessional
loans and other foreign assistance, such as from
Japan,
which charges only 1.5 percent against
China,
which charges 3-percent interest.
He added
these loans are usually paid over a period of 20 to 30
years with a 5 to 10-year grace period, the period when
only the interest is paid.
But
another Neda official had said loans from the Chinese
government, such as those that would be used for the NBN
and the Cyber Education program, are cheaper and faster
to obtain.
The
official, who declined to be identified, said this is
why government preferred to get a bilateral loan from
the China Exim Bank rather than go to multilateral
financing institutions (MFIs) such as the World Bank and
the Asian Development Bank for these two projects.
According to the official, previous loans from China had
an interest rate of only 3 percent compared to the usual
7 percent collected by MFIs.
Further,
the official said multilaterals impose more stringent
requirements than loans from the Chinese government.
This usually meant a longer time to secure loans for
urgent and important projects. (With J. Vallecera) |
