China says no natural resources collateral for PH loans

Katrina Domingo, ABS-CBN News

Posted at Mar 10 2018 03:17 PM | Updated as of Nov 14 2018 11:47 AM

MANILA - China's assistance and support to the Philippines come "with no strings attached," a Chinese foreign ministry spokesperson said Friday as he belied claims that Beijing had asked Manila for natural resources as loan collateral.

"China has never asked and will never ask relevant countries to use natural resources as collateral in loan agreements," Chinese Foreign Ministry spokesperson Geng Shuang said in a press conference in Beijing. 

"In this vein, our assistance and support to the Philippines are provided with no strings attached," he said.

Geng gave the statement days after a Chinese scholar Zhuang Guotu told China's Global Times that “[Chinese] loans are usually accompanied by repayment agreements, which use certain natural resources as collateral."

The article raised concerns in Manila that President Rodrigo Duterte's administration might end up leasing or selling the country's natural resources in exchange for funding for his P8.4-trillion infrastructure push.

Geng said Zhuang's statement "only represents himself, not the official stance of the Chinese government."


The official further said Manila and Beijing's territorial disputes in the South China Sea would not affect economic and trade cooperation projects between the two countries.

"China will not link the South China Sea issue with bilateral, economic and trade cooperation projects," Geng said.

"China stands ready to work with the Philippines to follow through on the consensus between the two leaderships and stay committed to properly resolving differences through dialogue and consultation, ensuring the sound and steady development of bilateral relations and jointly upholding regional peace and stability," he added.

Last year, the Association of Southeast Asian Nations (ASEAN) and China agreed to draft a code of conduct in the South China Sea where Beijing has overlapping claims with the Philippines, Brunei, Malaysia and Vietnam.

Manila and Beijing have revived dialogue in a bid to settle the sea dispute, with the latest round held last month. 

On Tuesday, Presidential Spokesperson Harry Roque said the Philippines and China could set aside sea disputes and jointly explore the resource-rich waters where $5 trillion in shipping trade pass annually.

Experts said China should first recognize that the areas to be explored belong to the Philippines before plans of joint exploration can push through.

In 2016, an arbitration court invalidated Beijing's sweeping claims in the South China Sea. The decision, considered a landmark win for the Philippines, was downplayed under the current administration as Duterte pursued closer ties with the world's second largest economy.