MANILA - The Philippines will not fall into a China debt trap because Manila is an "expert in bad loans," Foreign Affairs Secretary Teodoro Locsin Jr. said Saturday.
"Pagdating sa loans, they always ask me to be careful. My answer to that is we are the experts in the bad loans," Locsin told radio DZMM.
"Kasi during the time of Marcos, the World Bank, the IMF (International Monetary Fund), and the New York Banking System lent billions of dollars to Marcos and his cronies, ninakaw nila. So the economy started to collapse."
This, after the government was urged to read the "fine print" of its loan deals with China and other foreign governments to avoid falling into a debt trap.
Bayan Muna earlier flagged a $69-million loan for an irrigation project, which it said charges high interest rates, a commitment fee, and a management fee for a loan that will run for 20 years.
Finance Assistant Secretary Tony Lambino said that no public assets will be used as "any sort of payment" in case of failure to comply with the borrowing terms.
Locsin also defended the Duterte administration's decision to sign a loan agreement with China instead of Japan, which offers a lower interest rate.
"Japan is better because their interest rate is near zero. But there are projects which Japan will say no we’re not interested. So then you go to China," he said.
"The Japanese interest rates are really low and that is part of their problems in their economy so there’s not that much demand for credit."
Locsin said that if the Philippines wants to fall into a debt trap, it should deal with a western bank.
"The West knows how to destroy countries and sanay sila. Ang expertise ng western banking is how to screw a country. While the Chinese are still looking for friends, as long as you’re paid and you don’t steal the loan, you’re still okay," he said.
"If you want really a debt trap, try a western bank."