Anti-corruption group urges Ombudsman to probe DOF chief over China loan

An anti-corruption group urged the Office of the Ombudsman on Monday to launch a probe against Finance Secretary Carlos Dominguez III and a loan the Philippines entered into with China to finance the government's P8.2-trillion Build, Build, Build infrastructure program.

In a letter-complaint addressed to Ombudsman Samuel Martires, Filipinos Opposed to Corruption and Unjust System (FOCUS) spokesperson Jun Braga said that a multi-billion-dollar loan secured by the Philippines from China is at risk, since Dominguez will be the one who will handle the huge sum of money.

"FOCUS believes that the loan is highly disadvantageous to the people particularly that it was approved by Secretary Dominguez. In line with this, FOCUS believes that there should be an inquiry on this matter to protect the interest of the country and the Filipino people," Braga said.

During President Rodrigo Duterte’s visit to Beijing in 2016, China committed to provide $9 billion in loans for Philippine infrastructure projects. Only one loan agreement has been signed with China since then—the Chico River Pump Irrigation project, worth P4.372 billion or $81.81 million.

In FOCUS's complaint, Braga linked Dominguez to the P6.19-billion loan payment of the Philippine National Construction Company to Radstock Securities Limited in 2007, when Dominguez was still serving as one of the British lending firm's directors.

He said the loan initially amounted P2 billion when it was approved 26 years ago, but that it loan ballooned to more than P6 billion due to high interest rates under Dominguez's leadership.

Braga warned that the Philippines would suffer the same fate with the Chinese loan, saying that it had an interest rate of two to three percent, as opposed to a loan from Japan that would have an interest rate of around 0.25 to 0.75 percent.

Braga said the loan also opens the "direct participation of Chinese contractors unlike Japan's loan wherein anyone can bid."

"Although the loan could really help in building infrastructure projects in the country, we should be aware that the strategy of China is known as debt-trap diplomacy that has victimized poor countries in the past decades," Braga said in the letter-complaint.

"The payment of the loan is more disturbing since the loan is very expensive and to cope with the same, ordinary citizens shall carry the burden by expecting more or higher taxes to be able to pay back China," he added.

Braga said the loan is also "highly suspicious" due to the territorial dispute between the Philippines and China.

The government has reiterated that the Philippines will not fall into a “debt trap” with China as the country has a healthy fiscal position with a debt-to-gross domestic product ratio of 42 percent in 2017.

The Philippines is expected to sign at least 10 infrastructure projects with China when President Xi Jinping visits in November. This includes the North-South Railway-South Line, Subic-Clark Railway, and the New Centennial Water Source-Kaliwa Dam.

GMA News Online has sought comment from Dominguez. — with a report  by Jon Viktor D. Cabuenas/BM, GMA News