CONTRARY to the analysis of a United States-based think tank, the Philippines is not falling into a debt trap at the hands of China, according to Budget Secretary Benjamin E. Diokno.
In a recent news briefing, Diokno refuted allegations by economist Anders Corr, founder of Corr Analytics Inc., saying the Philippines is sinking into debt, given the proposed borrowings from China.
“The total amount of loans and grants from China is around $9 billion, and the loans shall be at a preferential rate,” Diokno said at the Kapihan sa Manila Bay forum held last week.
“We have not yet discussed the preferential interest rate but the Chinese told us not to tell the rates to other countries, because the other countries might get jealous because the preferential rates will be much lower than that granted to other countries,” he added.
Diokno was debunking Corr’s analysis that the Philippines’s borrowings are too high, and this might cost the country its resilient GDP growth. Corr’s remark that the country is falling into a debt trap is often quoted in local media.
According to Diokno, Corr “misleadingly claimed” that soft loans from China carry high interest rates. However, this is false, the chief of the Department of Budget and Management (DBM) said, given that the Philippines maintained excellent investment-grade level for several years now.
He added the Philippines will continue to accept official development assistance from other countries, but should they come with strings attached, the government will reject them without thinking twice.
“If other countries want to help, then they are welcome, but if there are strings attached, then we’ll just say, ‘No, thank you’,” he said.
The Philippines has recently rejected grant from the European Union, saying it entails policy intrusion on the part of the EU.
Meanwhile, the Philippine-BRICS Strategic Studies (PH-Bricss) cited the administration for participating in China’s One Belt, One Road initiative, which will involve billions of dollars of Chinese investments to countries enlisted in the revival of the maritime Silk Road.
In a statement, PH-Briccs said the Philippines should hold on to its economic policy under the “Build, Build, Build” scheme to bridge the infrastructure gap in the country estimated by the Asian Development Bank to require some $127.12 billion in investments from 2010 to 2020, or some P552.50 billion on infrastructure spending per year.
“The Philippines must not miss the opportunity today offered by the One Belt, One Road, as it did in the 1980s when Asian and Asean countries transitioned to tiger economies, while the Philippines wallowed in the mire of political turmoil and misinformed economic theories. Today we read and hear a chaos of opinions from the usual suspects questioning Dutertenomics and the One Belt, One Road opportunities, but the nation has already learned from its past—the Philippines is already on board,” the statement read.
4 comments
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For the enlightenment of plofessor dokdok-no regarding his statement of: “We have not yet discussed the preferential interest rate but the Chinese told us not to tell the rates….”
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Here are select 1987 Philippine Constitutional provisions concerning Foreign Loans.
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When and if you need an interpreter, let us know. We may draw it for you and even go as far as an interpretive dance number….. tsk!
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ARTICLE VII EXECUTIVE DEPARTMENT
Section 20. The President may contract or guarantee foreign loans on behalf of the Republic of the Philippines with the prior concurrence of the Monetary Board, and subject to such limitations as may be provided by law.
The Monetary Board shall, within thirty days from the end of every quarter of the calendar year, submit to the Congress a complete report of its decision on applications for loans to be contracted or guaranteed by the Government or government-owned or controlled corporations which would have the effect of increasing the foreign debt, and containing other matters as may be provided by law.
ARTICLE XII NATIONAL ECONOMY AND PATRIMONY.
Section 21. Foreign loans may only be incurred in accordance with law and the regulation of the monetary authority. Information on foreign loans obtained or guaranteed by the Government shall be made available to the public.
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crystal ba?
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Frankly, Mr Corr’s analyses on a wide range of topics is completely bogus. He made the same ridiculous arguments about Pakistan too, and even encouraged the US, India, and Afghanistan to sabotage China’s multi billion dollar China Pakistan Economic Corridor. It all stems from his deep deep deep hatred of china. You can find him on Facebook and see how many anti-China groups he’s a member of. Even if you’re concerned about Chinese money, you shouldn’t read too much into Corr’s hilariously warped views. He’s kind of an idiot, which is shocking since he has a degree from an Ivy League university. But obviously a diploma doesn’t mean you’re smart.
Looks like someone paid you for this comment. Sad, non-gainful employment.
That’s an idiotic response. Well done!