Palace vows transparency in $160-B infra push as debt, corruption fears persist

Dharel Placido, ABS-CBN News

Posted at May 15 2017 06:49 PM

Palace vows transparency in $160-B infra push as debt, corruption fears persist 1

MANILA – Malacañang on Monday assured the public that transparency will be a paramount consideration as the Duterte administration embarks on an ambitious P8-trillion plan to build infrastructure around the country.

“By the end of six years, a total of 160 billion US dollars would have been spent or eight trillion pesos. For that, we need some sort of assurance that it will be well spent and it would go to whatever purpose it was meant to be,” Presidential Spokesperson Ernesto Abella said during the “Dutertenomics in China” event in Beijing.

“[To] ensure speedier and transparent implementation of infrastructure projects, we will harness and not only closely monitor every stage of each project. We will also harness the public, the media, and the business community in keeping watch of projects and alerting us on any problems and issues.”

Abella said President Rodrigo Duterte wants the projects to move for the benefit of the nation and ensure there are no anomalies in their implementation.

Concerns have been raised about whether the Philippines would be incurring unsustainable debt with its infrastructure push. 

China’s launch of the Silk Road Initiative, which seeks to improve connectivity between Asia, Europe and Africa through infrastructure investment, has also positioned Beijing as the most likely lender for Manila, prompting concerns that the infrastructure projects could trigger unsustainable debt and be vulnerable to corruption.

In a Forbes opinion piece, Corr Analytics founder Anders Corr has warned that the Philippines might fall into “debt bondage” if the Southeast Asian nation’s infrastructure push will be fueled by high-interest rate loans from China.

Corr said, given China’s prevailing interest rates, the current Philippine national government debt of approximately $123 billion could rise to over a trillion US dollars in 10 years.

“The only way to stop such unjust debt is for the terms to be entirely transparent to the Philippine public in advance, for full cost-benefit analyses to be done by an independent authority on each deal, and for the Philippine Congress to vote on whether each deal proceeds. Failing that will lead to virtual Philippine debt bondage to China,” Corr said.

“At any likely interest rate, the Philippines will have trouble repaying $167 billion in debt, plus interest, to China. The Philippines will have to give political and economic concessions to China in order to repay annual interest, or renegotiate such a large quantity of debt.”

Philippine Trade Secretary Ramon Lopez sought to dispel such concerns, saying only 20 percent of the total budget for the Philippines’ infrastructure program under Duterte will come from loans.