MANILA, Philippines – Finance Secretary Carlos Dominguez III claimed that those who continue to raise the “false specter” of the Philippines falling into China’s debt trap have no faith in their own country. 

In a statement on Tuesday, April 2, Dominguez said the government has never failed to pay its debts even during the worst of times.

He cited that the Philippines was able to pay off the $2.2-billion Bataan Nuclear Power Plant project of former president Ferdinand Marcos despite it turning out to be a “white elephant.”

“The Philippines has no history of defaulting on its loans. So why are people saying now that we will default? They have no faith in the Philippines? I don’t know why people are saying, ‘There might be a default.’ That means to say those people have no faith in their own country,” Dominguez said.

The finance chief added that there is no collateral involved in the loans entered into with any country.

Of the 9 loan agreements made public by the Department of Finance, only contracts with China had waivers pertaining to sovereign immunity and patrimonial assets. (READ: Made in China: Loan terms with waivers, shrouded in secrecy)

Supreme Court Senior Associate Justice Antonio Carpio earlier warned that the “expensive” Chico River Pump Irrigation project would allow China to take gas-rich Reed Bank should the Philippines default on its P3.69-billion loan.

Senatorial bet Neri Colmenares called the agreements “onerous” and “one-sided.”

Chinese contracts also have confidentiality clauses, but the Philippines was able to push for transparency.

Government officials earlier assured Filipinos that each loan agreement tediously went through scrutiny of various agencies and experts.

As of 2018, the government’s project debt exposure was only 0.66% to China and 9% to Japan in relation to the total debt. 

By 2022, when most of the financing for the Build, Build, Build program will have been accessed, the project debt to China will account for 4.5%, while that of Japan’s will be more than twice as large at 9.5% of the total debt. – Rappler.com