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PHL smarter, won't fall into China's debt trap, says analyst

"Smarter" and more experienced in managing loans, the Philippines will not go the way of Sri Lanka, which was forced to hand to China one of its ports and several acres of land when it failed to pay its debt, a maritime expert said.

"I don't think mangyayari sa atin iyon, unless brasuhin talaga ng decision-maker," Jay Batongbacal,  director of the University of the Philippines' Institute for Maritime Affairs and Law of the Sea, said when asked if the Philippines is likely to suffer the same fate as Sri Lanka.

During the visit of Chinese President Xi Jinping in the country November 20-21, a total of 29 bilateral agreements were signed between the Philippines and China, including a memorandum of understanding for a joint oil and gas exploration in the West Philippine Sea.

Several lawmakers and even Vice President Leni Robredo have called on the Duterte administration to make public the details of the contracts, expressing apprehension that the loan agreements could put the country into a debt trap.

Malacanang has yet to release the total amount of the loans.

At a Palace briefing on Tuesday, presidential spokesperson Salvador Panelo had said that President Rodrigo Duterte would persuade Xi loan pledges worth US$24 billion. 

Of the amount promised two years ago during Duterte's visit to China, Panel said only around US$100 million was released for the construction of two bridges in Manila.

Batongbacal said the government has put in place "processes and procedures" to manage loans and assistance.

"Actually, I would attribute a lot of delays and the slowness of the projects to the fact that the Philippines is a lot smarter than Sri Lanka in a way," he told GMA News Online.

He said the Philippines knows what to do having been a long-time recipient of foreign aid, development assistance and loans.

"Natuto na tayo, and even the Secretary of Finance, the Department of Budget and Management said they are doing the proper vetting," Batongbacal added.

The Sri Lanka port loan controversy started in 2012 when then President Mahinda Rajapaksa started seeking loans from China to build an ambitious port.

True to the results of feasibility studies, the Hambantota Port Development Project did not make money and left Sri Lanka in heavy debt.

In 2015, the new administration of Sri Lanka was forced to hand over the port to China and 15,000 acres of land around it for 99 years. —LDF, GMA News