PHL to review loan deals with China after US VP Pence’s warning

The Philippine government will review its loan agreements with China after US Vice President Mike Pence made warnings about China's supposed "debt diplomacy," according to Finance Secretary Carlos Dominguez on Monday.

"With those remarks, we will certainly review it again... the Belt and Road agreement but essentially, from our point of view, it will not compromise our sovereignty and it will be quite helpful to everybody," Dominguez said in a report by Jam Sisante on GMA News' Unang Balita.

Pence accused China of utilizing "debt diplomacy" in order to expand its influence worldwide, saying that Beijing is offering hundreds of billions of dollars in infrastructure loans to various countries in different regions but these "opaque" loans will only benefit China.

China's foreign ministry, however, said on Sunday that no developing country would fall into a debt trap simply because of its cooperation with Beijing.

"No developing country will fall into debt difficulties because of cooperation with China," Hua said.

"On the contrary, cooperating with China helps these countries raise independent development capabilities and levels, and improves the lives of the local people," Hua added.

US and China have been engaged in a trade war, sparked by US President Donald Trump’s accusations that China has long sought to steal US intellectual property, limit access to its own market and unfairly subsidize state-owned companies.

Both countries have imposed increasingly severe rounds of tariffs on each other's imports.

Meanwhile, the Philippines will be an important partner for China's expansion of its Belt and Road Initiative, which aims to establish a trade and infrastructure network connecting Asia with Europe and Africa along the ancient trade routes.

Trade and Industry chief Ramon Lopez expressed confidence that the Philippines would gain from its loan agreements with China.

"'Di naman tayo papasok if those our unreasonable terms and terms that are worse than other sources. Based on numbers also, from what I've remembered, we are not overleveraged. In other words, we can absorb more debts as long as maganda ang terms," Lopez said.

Chinese President Xi Jinping will make his first state visit to the Philippines on November 20-21, in which at least 10 financing agreements are expected to be inked.

These include deals on the Manila to Bicol Railway Project as well as the Mindanao Railway Project.

"These face-to-face meetings are so important because they promote understanding and goodwill between the leaders but also show a good example to their citizens that the Philippines and China should cooperate more closely and cooperation comes from understanding each other, each other's position very well," Dominguez said. —Anna Felicia Bajo/KG, GMA News