By Mario Casayuran
The Senate economic affairs committee is focused on the passage of a law on public debt management that seeks, among others, public discussions on the issue of transparency, as the country’s economic managers revealed that the Duterte government has entered into a P2.1 trillion loan agreements for its 75 flagship projects.
Sen. Sherwin T. Gatchalian (Senate of the Philippines / MANILA BULLETIN)
Aside from demanding transparency, the committee, chaired by Senator Sherwin T. Gatchalian, said the Senate wants to know how the government evaluated the debts and the economic benefits of the projects that define President Duterte’s ‘’Build, Build, Build’’ infrastructure program.
Briefing Senate reporters after a four-hour committee hearing, Gatchalian emphasized that the loans would not be shouldered by President Duterte but by Juan de la Cruz, meaning the Filipino people.
Gatchalian also said that China did not corner all the loans given to the Philippines since its loans accounted for 30 percent of the loans.
China’s interest rate that hovers between two to three percent is not that high compared to the Asian Development Bank (ADB) and World Bank (WB) whose interest rates are from 3.5 percent to 3.6 percent.
Japan, on the other hand, cornered 50 percent of the loans but its interest rate is below two percent. ‘’It is a volatile currency,’’ he explained.
‘’If you compare that with other multi-laterals, China’s is not that high,’’ he said.
That is why the Department of Finance is diversifying its loan portfolio, he pointed out.
He conceded that there were no explicit explanations by the national government on some of the flagship projects.
Gatchalian said that there should be regular reporting by the national government agencies on the loans they have entered into.
Of the 75 flagship projects, about 28 projects with a project cost of P319 billion would be completed in 2022, the end of the six-year term of President Duterte while the remaining 47 projects would be implemented by Duterte’s successor.
Gatchalian said he would conduct another hearing as he awaits other data to be submitted by the National Economic Development Authority (NEDA).
Asked if Congress has the power to have questionable loans deemed invalid, he said that the Legislative Branch could withhold funding for such projects during budget hearings.
Department heads would also be made accountable for entering into loans with anomalous provisions. he pointed out.
Gatchalian said the committee would then focus its attention on Senate Resolution 628 authored by detained Senator Leila de Lima who wanted to see the complete terms and conditions of the loans entered into by the government to fund the President’s ‘’Build, Build, Build’’ program and assess the possible impact of such loans on the Philippine economy and national security.
De Lima stressed that without greater transparency and careful cost-benefit analysis, ‘’the Duterte administration may condemn the Philippines to unsustainable levels of national debt and open the country up to all the pitfalls that come with it.’’
‘’Tying the Philippines to huge monetary indebtedness to China will also have an undeniable impact on the conduct of our foreign relations, and most certainly will be used by China as leverage against us in its continuing effort to undermine our claims over our Exclusive Economic Zone (EEZ) in the West Philippine Sea, thereby posing a threat to our national defense and security, aside from mortgaging our country’s and our children’s future to a foreign power,’’ de Lima said.
‘’Congress, as representatives of our people must be involved in the negotiation of the loan agreements to ensure that the terms provided in the said agreement are fair and in keeping with our country’s ability to utilize the proceeds and pay such loans.’’ she added.