MANILA – No Philippine properties were used as mortgage in any of the country's loans to China, Budget Secretary Benjamin Diokno on Friday said.

The "golden rule" is to borrow only if returns are higher than the cost of borrowing and if projects have at least 10 percent economic internal rate of return, Diokno told ANC's Headstart.

"We do not mortgage our piece of property. It’s a straightforward deal. The internal rate return has to be higher than the cost of money," he said.

Projects were also chosen “rigorously” based on economic benefits such as the Mega Manila Subway project, intended to reduce congestion in Manila that causes P3.5 billion daily loss.

"Now interest rates are very low …Our debt to GDP ratio right now is only 40 percent and declining and so we are now able to do this plus we have a very rigorous process of selecting projects," Diokno said.

“The donors did not choose these projects. We identified this and we told them would you like to finance these and they agreed,” he said.

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Finance Secretary Carlos Dominguez on Wednesday said the Philippines won't fall into a debt trap because the country "borrows with prudence."

By the end of Duterte's "Build, Build, Build" program, China would have accounted for P4.50 for every P100 of the Philippines' total debt, compared to P9.50 from Japan, he said.

• 'No danger' of debt trap for Philippines, says Chinese envoy