MANILA, Philippines — Malacañang on Saturday slammed senatorial candidate Neri Colmenares for allegedly seeking media mileage by politicizing the country’s loan agreements with China.
Colmenares in a press briefing Thursday said the Philippines has entered into an alleged disadvantageous loan agreement with China for an irrigation project in the Cordillera.
“The loan agreement for the Chico River Pump Irrigation Project is onerous and highly favors China. It is a disaster for the Philippines,” said Colmenares, who obtained a copy of the document from a non-governmental organization.
READ: Ex-lawmaker raises alarm over onerous’ China loan
Presidential Spokesperson Salvador Panelo said Colmenares was only seeking media mileage as the loan agreement with China was studied.
“It is clear that the matter has been studied at length by our economic managers, particularly the (Department of Finance), unlike Mr. Colmenares who has only shown himself to be ignorant of the intricacies of finance and immature with political pettiness,” Panelo said in a statement.
“Mr. Colmenares is just desperately seeking media mileage by unduly compartmentalizing the loan agreements of the country without the benefit of context and by maliciously labeling it as a China issue,” he added.
According to Panelo, the project was approved and reviewed by government agencies.
“For the information of Mr. Colmenares, the Philippines and China signed a $62.09 million (about RMB 430.26 million) last year to help fund the construction of the Chico River Pump Irrigation Project, which will provide a stable supply of water to around 8,700 hectares of agricultural land, benefit 4,350 farmers and their families and serve 21 barangays in the provinces of Kalinga and Cagayan in Northern Luzon once completed,” Panelo said in a statement.
“The aforesaid project has gone through an Investment Coordinating Committee approval and the loan agreement was reviewed, negotiated, and approved by the Interagency Committee composed of the Department of Justice, the Department of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP),” he added.
Panelo also said that based on the report of the DOF, China provided a list of three contractors of good standing and the implementing agency was given the opportunity to vet and request for a replacement, if needed.
He added that the Monetary Board approved the terms under the loan agreement for the Chico River Project before and after signing the agreement.
“On the concessional interest rate, according to the DOF, if we account for all salient factors and not just the nominal rate (e.g., project cost, denomination of loan, and foreign exchange depreciation risk, among others), the effective interest rates between the recently signed Japanese and Chinese loan agreements are actually quite close to each other. With regard to the interest rate, on the other hand, our Chinese loans are fixed and not subject to change over time,” Panelo said.
“For each loan agreement, the DOF mentions that an arbitration clause is negotiated. We negotiate to make sure that the arbitration mechanism protects our interests. Contrary to what others believe, project debt to China is but a fraction of our project debt to Japan. By 2022, project debt to China is estimated to be at around 4.5 percent of the total debt, while that of Japan will be at around 9.5 percent,” he added.
With this, Panelo hopes that the “left-leaning opposition” would perform staff work as the loan agreement underwent study and review by the DOF.
“We hope the political and left-leaning opposition would exercise completed staff work before issuing statements,” Panelo said. /muf