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China denies asking for PHL's natural resources as collateral for loans

The government of China has denied a Chinese newspaper article that said that loans extended to the Philippines usually came with a repayment agreement, which could use the country's natural resources as collateral.

"China has never asked and will never ask relevant countries to use natural resources as collateral in loan agreements. In this vein, our assistance and support to the Philippines are provided with no strings attached," Chinese Foreign Ministry spokesperson Geng Shuang said in a press conference on Friday, March 9.

Geng was asked by reporters to confirm a report published by Global Times, citing Zhuang Guotu - the head of Xiamen University Southeast Asian Studies Center, that loans from China usually include agreements with provisions that allow the Philippines to use certain natural resources as collateral.

"I would like to say that the view of the relevant scholar only represents himself, not the official stance of the Chinese government," Geng said.

Relations between the Philippines and China have been warming since President Rodrigo Duterte stepped into office, even amid tensions regarding the ownership of the West Philippine Sea.

"Since the turnaround of China-Philippines relations in 2016, China has been actively helping the Philippines develop its economy and improve people's livelihood, and we have given our full support to President Rodrigo Duterte's large-scale infrastructure program 'Build, Build, Build'," Geng said.

"To properly resolve the South China Sea issue is the basis and important guarantee for the sound and steady development of China-Philippines relations, but China will not link the South China Sea issue with bilateral economic and trade cooperation projects," he added.

"China stands ready to work with the Philippines to follow through on the consensus between the two leaderships and stay committed to properly resolving differences through dialogue and consultation, ensuring the sound and steady development of bilateral relations and jointly upholding regional peace and stability," Geng said.

Last week, Duterte said it would be better to conduct joint explorations with China, likening the situation to co-ownership of the area.

"The Chinese government and financial institutions have also provided financing support to the Philippines, including preferential buyer's credits, and assisted the Philippines in issuing the panda bonds, which effectively ensured the implementation of relevant projects," Geng said.

"By convention, parts of China's concessional loans require the borrowers to use certain sovereign credit as collateral, which is an international practice," he added.

Sovereign credit is a country's ability to pay obligations supported by the state's financial resources. —NB, GMA News