What debt trap?
Chinese Ambassador to the Philippines Zhao Jianhua downplayed on Tuesday warnings that the Philippines is heading for a debt trap after the government entered into Chinese loans to boost the administration’s P8-trillion infrastructure projects.
Zhao was in Intramuros for the groundbreaking ceremony for the Binondo-Intramuros bridge, a project funded from a Chinese grant.
“Let me make it quite clear, these projects, these two bridges are going to be financed by Chinese grants. That is, we’re going to build it for free,” he told reporters.
Analysts and some lawmakers had earlier warned the administration may fall victim to China’s “debt trap” after the government sought billions of loans and grants from China.
READ: China loans for PH firmed up
“You’re going to use some Chinese soft loans to finance some infrastructure projects. That is simply the decision by your government to use the soft loans and the infrastructure project will be undertaken by a Chinese company through limited bidding process,” Zhao said.
“There is no mention or no avenue for ownership, your government will own all those projects. So there will be no question of putting yourself in debt,” he added.
The Chinese envoy denied that there was such a thing as “debt trap.”
“I think your economic team is smart enough. Actually there has never been a debt trap. It’s all based on mutual agreement,” he said.
A state-controlled Chinese newspaper had earlier reported that the Philippine government would use natural resources as collateral for multimillion-dollar loans from China. /je
READ: China loans: PH natural resources as collateral?