Dominguez allays fears over 'Chinese debt trap'

ABS-CBN News

Posted at Dec 06 2018 06:51 PM

Philippines President Rodrigo Duterte (L) and Chinese President Xi Jinping shake hands after a signing ceremony held in Beijing, China October 20, 2016

MANILA - Finance Secretary Carlos Dominguez said the Duterte administration will not fall into a "debt trap" with China because it has "learned much from a previous administration’s scandalous mismanagement of Chinese financing."

Speaking before a business forum on Thursday, Dominguez did not mention which administration he was referring to, but alluded to the term of former President and incumbent House Speaker Gloria Macapagal-Arroyo. 

"During that time, the previous leadership allowed Chinese state-owned enterprises to dictate what projects will be undertaken here. I don’t have to mention the names. I’ll just mention some initials. ZTE, for instance," Dominguez said. 

Arroyo faced a graft case concerning National Broadband Network (NBN)-ZTE telecommunications deal, which was later dismissed by the Sandiganbayan in 2016.

Arroyo declined to comment when asked for a statement by ABS-CBN News. 

Dominguez brushed aside what he called "uninformed criticism" that President Rodrigo Duterte would allow the country to drown in debts to China. 

He said economic managers ensured that the country got the best deals possible "and that the cardinal tenets of fiscal discipline are carefully observed" in all of its financial agreements.

The finance chief earlier said that the country borrows "with great prudence" to avoid a debt trap.

Budget Secretary Benjamin Diokno has also said that no properties were mortgaged in China deals. Projects were also chosen by the Philippine government based on projected economic benefits, he said. 

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, Dominguez said.