Recto warns vs. 'debt trap' of China amid COVID-19 pandemic

Senate President Pro Tempore Ralph Recto on Tuesday said the Philippine government must limit its loans from China, especially amid the COVID-19 pandemic, as he upheld the need to protect the country's sovereignty over the West Philippine Sea.

"I think we should not be incurring more debts from China," Recto said in an interview on CNN Philippines.

The senator said he filed a Senate resolution urging the executive department to refrain from increasing the country's debt exposure to China.

"Because of the pandemic, in the Philippines, our revenues have gone down, we will be borrowing more and to finance the many Build, Build, Build projects that we will be undertaking, hopefully we should not be borrowing these bilaterally from China," Recto said.

"China already has a track record in lending out money to many countries and we've seen what has happened to many countries. There is what you call a debt trap as well," he added.

Recto said the resource-rich West Philippine Sea, which is also being claimed by China, must be protected for future generations.

President Rodrigo Duterte told Congress on June 15 that the Philippine government had raised a total of $6.4 billion in budgetary support financing for COVID-19 response as of June 11-- this is largely composed of “newly contracted loans” from the World Bank, Asian Development Bank (ADB), and the Asian Infrastructure Investment Bank (AIIB) as well as the dual-tranche issuance of US dollar-denominated global bonds.

Finance Secretary Carlos Dominguez III said last month that the Philippines will sustain its P3-trillion borrowing program in 2021 with bulk to be financed from local sources.

Aside from avoiding being heavily indebted to China, Recto also pushes for a ban on the award of government contracts to foreign entities involved in activities that infringe the country's sovereignty over the West Philippine Sea.

After the United States announced punitive measures against at least 24 Chinese companies involved in reclamation activities in the disputed parts of the South China Sea, Foreign Affairs Secretary Teodoro Locsin Jr. said he would recommend the termination of the country's contracts with these firms, if there are any.

The Palace, however, maintained that deals with Chinese contractors would push through to ensure that the administration's flagship program Build, Build, Build will not be curtailed.—AOL, GMA News