The government will not use any of the country’s territory as collateral for loans entered with China, Budget Secretary Benjamin Diokno said Wednesday.
“There’s no such thing as onerous conditions. We were smart. We’re not like other countries,” Diokno said in a press briefing.
“We don’t mortgage our territories for a loan that is as straightforward as a railway system and as I’ve said there is a strict and rigorous process (for the projects),” he added.
Diokno made the remark in response to IBON Foundation’s recent statement, which accused the administration of President Rodrigo Duterte of allegedly arranging questionable deals with China.
The group claimed that the government’s “Build, Build, Build” program will cause the country’s growing indebtedness to China, “which could result in the Philippines virtually giving up its sovereignty.”
Diokno earlier stressed that the Philippines will not fall into a debt trap with Beijing, as they are “very careful” in forging loan agreements.
The Philippines on Tuesday signed a memorandum of understanding with China on its Belt and Road Initiative during the visit of Chinese President Xi Jinping to the country.
Diokno explained that the country was in good position to avail of loans from China, citing the country’s low debt-to-GDP (Gross Domestic Product) ratio. /muf
READ: Diokno: PH ‘very careful’, won’t fall in China ‘debt trap’