MANILA - The loan agreements signed by the Philippines and China were negotiated “on equal footing”, Presidential Spokesperson Salvador Panelo said Monday, amid concerns that Beijing was luring Manila into a debt trap.
Panelo met with Chinese Ambassador to the Philippines Zhao Jianhua and discussed a host of issues concerning the two countries, including the controversial Chinese loans for irrigation and dam projects.
In a statement, Panelo said he and Zhao “share a similar view that the terms of the agreements were competently and fully negotiated by both parties on equal footing.”
“According to Ambassador Zhao, it is the strong and robust economy of the Philippines that led the Chinese Government to extend preferential credit terms for the country's infrastructure plans,” Panelo added.
Panelo last week said it was “only natural” for China to get an advantage in its Chico River irrigation loan agreement with the Philippines, Malacañang said Monday, addressing a Supreme Court Senior Associate Justice Antonio Carpio’s warning that the deal favors Beijing.
Carpio earlier warned that China could seize natural gas deposits in Reed Bank (Recto Bank) if the Philippines is unable to pay the $62-million Chinese loan for the Chico River Irrigation Loan Agreement.
Finance officials said the Philippines is fully capable of paying its loans from China, saying these are considered relatively small when compared to the country’s loans from other countries.
Concerns have been raised about the Philippines securing loans from China due to the two nations’ long-standing dispute in the South China Sea, a vital sea lane believed to be holding huge untapped natural gas and oil reserves.
The Philippines in 2016 won a ruling in a United Nations-backed arbitral tribunal which invalidated Beijing’s expansive claim to the South China Sea. China, however, has refused to recognize the ruling.
Under President Rodrigo Duterte, Manila has sought to forge closer ties with Beijing.