Militant solon warns PH of ‘debt trap’ from Chinese loans

Bayan Muna Rep. Carlos Isagani Zarate. (File photo from the Philippine Daily Inquirer)

A progressive lawmaker on Wednesday denounced a state-controlled Chinese newspaper report claiming the Philippine government would use natural resources as collateral for multimillion-dollar loans from China.

In a press briefing, Bayan Muna Rep. Carlos Isagani Zarate has warned that if the report was true, the Philippines may fall victim of China’s “debt trap” due to its “high interest rates.”

“Maaari tayong maging biktima ng debt trap ng China, papautangin at eventually dahil may collateral, at may mga kondisyones, ang mamayang Pilipino ang kawawa,” he said.

(We may fall victim of China’s debt trap, we’ll get loans and eventually because there are collateral and conditions, the Filipino will be at the receiving end.)

“We are warning the administration of not kowtowing to the whims and caprices of China, lalo na sa sinasabing natural gas ay isasanla na, dahil parang kasama naring isasanla ng present admin ang kinabukasan ng mga Pilipino,” he added.

(Especially in terms of making our natural gas as collateral because it is like the present administration making the future of Filipinos as collateral.)

But Malacañang had already dismissed the report as a mere “gossip.”

“Not true. That’s just [a] newspaper report in a country without freedom of the press,” Presidential spokesperson Harry Roque said in a press briefing.

“We need to rely on basic [documents] and there isn’t any,” he said.

READ: China loans: PH natural resources as collateral?

Last Monday, the Global Times published a report saying China has given $7.34 billion in loans and grants to the Philippines for its 10 large-scale infrastructure projects.

In the report, the head of Xiamen University’s Southeast Asian Studies Center Zhuang Guotu, discussed the cooperation between the two countries, saying that the Philippines could pay the loans because the interest rate set by China was “very low.”

“And the Philippines has strong debt-paying ability. Besides, the loans are usually accompanied by repayment agreements, which use certain natural resources as collateral,” Zhuang was quoted as saying.

Zarate said this only proves the “real motives” of China in helping the country.

“Tinutuligsa natin ito no dahil ito ay nagpapakita kung ano talaga sadya o ano purpose bakit napakagalante ng China sa ating bansa at kung paano naman ito inaaccomodate ng Duterte administration,” he said.

(We are opposing this because this clearly shows the real intention or purpose why China is showing a lot of consideration to our country and how the Duterte administration is accommodating all of these.)

“Sa ngayon ang utang natin ay nasa mahigit P6.8 trillion na lalaki at lolobo pa dahil sa maambisyosong Build, Build, Build program na kalakahan ay popondohan through utang, principally from China and Japan,” he said.

(Currently, our debt is about P6.8-trillion and will continue to balloon because of the ambitious Build, Build, Build program that will be funded eventually through debt, principally from China and Japan.)

The report of the Chinese newspaper comes after President Rodrigo Duterte likened to “co-ownership” the possible joint exploration of the Philippines and China in the West Philippine Sea.

“Ngayon offer nila (China) joint exploration ‘di parang co-ownership. Parang dalawa tayong may-ari niyan. Eh ‘di mas maganda ‘yan kaysa away,” Duterte earlier said.

(Now, China is offering join exploration more likely co-ownership. It’s like two of us owning it. So, this is better than fighting.)

Zarate said this remark sends a “dangerously wrong message” that the Duterte administration “disregards our hard won victory at the International Tribunal at the Law of the Sea (ITLOS).”

In July 2016, the UN-backed Permanent Court of Arbitration in The Hague

ruled in favor of the Philippines, invalidating China’s claim over the seas. But the latter refuses to recognize the ruling. /jpv

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