Drilon backs scrutiny of proposed loan agreements with China to prevent debt trap

By Hannah Torregoza

Senate minority leader Franklin Drilon on Sunday backed calls to review the loan agreements the Philippines signed with China, including the Chico River Dam and the Kaliwa Dam projects.

Senate Minority Leader Franklin Drilon (Facebook / MANILA BULLETIN)
Senate Minority Leader Franklin Drilon (FACEBOOK / MANILA BULLETIN)

Drilon issued the statement following Senior Associate Justice Antonio Carpio’s warning that a provision in the Chico River loan agreement might force the Philippines to give up its patrimonial assets.

“I support the proposal to review the various loan agreements with China. It’s not unusual for loan agreements to be reviewed. It’s part of the check and balance,” Drilon said.

The minority leader noted that many other countries have warned the government of falling into a debt trap with China, as what happened with some countries, including Sri Lanka and Ecuador, which are now having difficulty paying off their loan obligations with China.

“Let us review and expose these; ilabas sa taumbayan yung terms, dahilan taumbayan din naman ang magbabayad nito through public funds (reveal to the public the terms of the agreement, because the people are the ones who would pay for these through public funds),” Drilon said.

“Let’s find out if there are indeed stipulations which are too favorable to China, because many were saying the terms are very disadvantageous to the country,” Drilon said.

“Ang importanteng tingnan yung tinatawag na debt trap, kasi baka pagdating ng panahon hindi na makayanang bayaran ito (We need to look into these so-called debt trap provisions because in time, we might have a hard time paying the loan),” the minority leader said.

Drilon pointed out that the questionable Northrail and NBN-ZTE broadband deal where among the government’s undertakings with China that were thoroughly scrutinized by Congress.

Drilon recalled Duterte’s predecessor, former President Benigno Aquino III, was forced to rescind the contract on the Northrail project because it was really disadvantageous to the Philippine government.

“We paid for some stipulated damages. But the judgment call was that it was really disadvantageous to us. It’s not for us to review all loan agreements,” the minority chief said.

“When Congress reviewed the Northrail project, then President Aquino saw it violated the Constitution, and he rescinded the agreement. It’s part of the check and balance,” he pointed out.

Drilon also said there is nothing wrong in listening to the advice given by leaders of other countries who have experienced dealing with China.

“Even the United States have told us to be careful. There’s nothing wrong with that, but at the end of the day, we are still the ones that will decide. So it’s not wrong for us to review (these loans). I am in favor of reviewing all of it,” Drilon said.

The United States has aired its concern about the possibility of the Philippines falling into a “debt trap” with China.
Malaysian Prime Minister Tun Dr Mahathir Mohamad also earlier cautioned the Philippine government abouit falling into a “debt trap” when he visited the country early this month.

In 2018, the Prime Minister cancelled two major infrastructure projects by Chinese companies in Malaysia.

READ MORE:  China assures loan agreement carefully negotiated

 
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