De Lima seeks Senate probe on infrastructure loans, warns of deals with the Chinese

ABS-CBN News

Posted at May 17 2017 04:47 PM

Chinese President Xi Jinping (back-right) and Philippines President Rodrigo Duterte (back-left) attend a signing ceremony after their bilateral meeting during the Belt and Road Forum in Beijing, China Monday. Etienne Oliveau, Reuters

MANILA - Senator Leila de Lima on Wednesday sought a legislative inquiry into the Duterte administration's P8-trillion infrastructure project that would be financed through foreign loans, potentially including funds from the Chinese government. 

In Senate Resolution No. 377, De Lima called for the Senate to look into the terms of any loan agreement with China that may either put the country in dire debt or force the country into commitments that might undermine its sovereignty.

"While there is a need to stimulate the economy, there is an even greater need for our economic managers to exercise extreme caution before advising our President to enter into any loan agreement of this magnitude," she said.

De Lima cited separate reports from Forbes Magazine and Reuters warning about the danger of long-term indebtedness among allied countries under China's Silk Road Initiative.

The Silk Road aims to connect countries of Asia, Europe, and Africa with each other, primarily through infrastructure projects that are to be financed, in part or in whole, by China, such as ports, roads, railways, and bridges.

President Duterte had just come from China to take part in the Belt & Road Forum for International Cooperation, where Beijing pitched its plan to establish sea routes and railways to connect the three continents to facilitate greater trade. 

Following bilateral talks with Chinese President Xi Jinping on the sidelines of the forum, Duterte secured a 500-billion Chinese yuan (P3.6 billion) grant for the construction of bridges along Pasig River and drug-rehabilitation facilities.

But there has yet to be any confirmed Philippine loan from China under the President's infrastructure undertaking. 

De Lima, among the President's most vocal critics, pointed out that some countries had to resort to desperate measures to renegotiate their loans with China. 
 
For instance, she noted that Mongolia had to sell coal to China for only 11 percent of the international market price, Venezuela had to ask for more loans from Russia, and Sri Lanka had to offer debt-for-equity swaps to Beijing. 

De Lima had earlier called for an inquiry into at least 17 investment deals worth signed during President Duterte's state visit to China last year.

 She recalled two separate investigations conducted by World Bank (WB) in 2009 and 2011, which found at least seven Chinese firms and one individual to have engaged in a "collusive scheme designed to establish bid prices at artificial, non-competitive levels." 

Malacañang, for its, part, earlier vowed that transparency will be a paramount consideration in the administration's infrastructure push. 

Trade Secretary Ramon Lopez assured that the Philippines would not fall into a "debt trap" over the infrastructure program.