De Lima urges Duterte admin to follow Malaysia’s lead on Chinese-backed projects

Detained Senator Leila de Lima is urging the Duterte administration to follow Malaysia’s lead to renegotiate, or possibly cancel, Chinese-backed projects to prevent the Philippines from going bankrupt due to what she claimed are crippling debts.

“The Philippine government must take its cue from Prime Minister Mahathir (Mohamad) who decided to cancel three China-backed projects amounting to USD22 billion to avoid his country from falling into a debt trap. We need to take heed before it’s too late,” De Lima said on Friday.

Mahatir suspended Chinese projects authorized by former premier Najib Razak and vowed to discuss it with China.

The Philippine government must look at the long-term economic repercussions of the planned China-funded infrastructure projects and investments in the country, De Lima said in a statement.

“Entering into loan agreements, especially those that are not obtained through competitive procurement, can put not only our country in dire debt and cripple our economy, but also undermine our sovereignty and national security,” she said.

The administration has earmarked some P8.2 trillion funding the “the golden age of infrastructure” under the “Build, Build, Build” program during the term of President Rodrigo Duterte.

Last year, Budget Secretary Benjamin Diokno told GMA News Online that the bulk of funding would come from taxes but other project would be debt-financed.

De Lima, who chairs the Senate committee on social justice, welfare and rural development, has filed several bills seeking inquiry into various transactions of the Duterte administration with China.

In Senate Resolution No. (SRN) 222, filed on Nov. 7, 2016, the senator seeks an inquiry into the various investment deals entered into by the Duterte administration during the President’s state visit to China in October 2016.

In May 16, 2017, she filed SRN 377 urging the Senate to look into the possible onerous terms and long-term financial and economic repercussions of the multi-billion dollar loans and investment packages offered by China to the Philippines under the belt and road initiative.

The senator filed last February SRN 628 for the appropriate Senate committee to investigate the complete terms and conditions of the loans entered into by the Philippine government to fund its “Build, Build, Build” program, and assess the possible impact of Chinese loans on the economy and national security.

De Lima is concerned about the administration’s lack of transparency when it comes to the terms and conditions of Chinese loans to fund the infrastructure program, especially because lenders, including China, pay a 2-7 percent finder’s fee for each agreement.

The loans offered by China would impact on the Philippines’ foreign policy, including the country’s stakes in the contested islands in the South China Sea, the senator claimed.

“We should learn from the mistakes and misfortunes of other countries in their dealings with China. Our national leaders should exert all honest efforts in protecting our country and the Filipino people against imprudent debt accumulation,” she said.

She cited the cases of Mongolia, which had to sell coal to China for only 11 percent of the international market price, and Sri Lanka’s debt-to-equity swaps with China for its infrastructure projects. —VDS, GMA News