By Hannah Torregoza
Opposition Senator Leila de Lima on Monday urged the Duterte administration to heed United States Secretary Mike Pompeo’s and Malaysia Prime Minister Mahathir Mohamad’s advice to be wary with its loan agreements with China.
Senator Leila de Lima
(REUTERS/Romeo Ranoco / MANILA BULLETIN)
Doing so, de Lima said, would prevent the Philippines from falling into a debt trap, which may eventually lead to commitments that threaten the country’s sovereignty.
“This is not the first time that top leaders or experts cautioned us about our dealings with China that could unfavorably affect our country’s future, both in the aspects of financial and territorial security. We need to learn from the unfortunate fate of others who borrowed before us,” de Lima said.
De Lima said the government should learn from the mistakes of other Asian countries who borrowed heavily from China to fund their infrastructure projects.
“I urge the Duterte administration to listen to the advice of US and Malaysia, and stop binding the Philippines to huge monetary indebtedness to China at the expense of Filipino taxpayers who stand to pay for the onerous loans in the years to come,” said de Lima, who chairs the Senate committee on social justice, welfare and rural development.
Mahathir, during his visit to the Philippines last March 7, warned the Philippines about falling into a debt trap amid the country’s obvious dependence on China to fund its ambitious infrastructure projects, among others.
The Malaysian leader said countries like the Philippines should regulate or limit influences from China.
“If you borrow huge sums of money from China and you cannot pay—you know when a person is a borrower he is under the control of the lender. So we have to be very careful with that,” Mahathir had said.
Mahathir said he was speaking from experience, considering that his government already withdrew the so-called “unfair” China-backed projects, including a railway connecting Malaysia's east coast to southern Thailand and Kuala Lumpur, and two gas pipelines.
Department of Foreign Affairs (DFA) Secretary Teodoro Locsin Jr. confirmed that Pompeo admitted that America was worried about the Duterte government’s move to borrow heavily from China as it could lead the country to falling into a debt trap in a meeting held during the latter’s visit in Manila from February 28-March 1.
But instead of considering Pompeo’s advice, Locsin said he insisted that the US Secretary of State should not “worry about the debt trap” because “we are the experts in bad loans.”
De Lima, however, said Locsin should reconsider his pronouncements and act before “it’s too late.”
“We need to be smart and strategic when it comes to loan agreements with China if we do not want to see a recurrence of the Marcos-era debt trap,” De Lima maintained.
The detained lawmaker reiterated there is a need for the government to look into China’s pattern of luring poorer nations to accept its loan offers that eventually resulted in debt traps, thereby allowing it to gain power and influence over them.
“Warnings are everywhere and it must not be ignored, lest we want China to also use these bad loans as leverage against the Philippines in its aggressive effort to undermine our claims in the disputed islands in the South China Sea, or the West Philippine Sea,” she said.
She said Sri Lanka and Mongolia are just some of the countries that suffered from unsustainable debt by accepting Chinese loan investments.