Chinese debt trap? Americans did it too – Dominguez

MANILA, Philippines – Finance Secretary Carlos Dominguez III assured lawmakers that the Philippines will not fall into China's debt trap.

"We are not naive. We know all ODA (official development assistance) projects of all countries are designed to influence. The Japanese do it, the Americans, Europeans, Chinese, and even Koreans," Dominguez said during the budget deliberations of the Development Budget Coordination Committee (DBCC) at the House of Representatives on Tuesday, July 31.

The finance chief even went on to say that the Philippines already experienced the debt trap during the early '40s up to the '70s.

"When the Americans bombed Manila, then gave us a little money to fix it up, they extracted from us. 1946 to 1974 parity rights, that means to say they had access like any other Filipino to our resources, so we have experienced that," Dominguez said. (READ: Hits and misses of Duterte's infrastructure push)

He assured legislators, particularly Magdalo Representative Gary Alejano who brought up the matter, that economic managers are careful not to repeat the mistakes of the past. (READ: [OPINION] What scares me the most about China's new, 'friendly' loans)

Alejano told Dominguez what happened to Sri Lanka and Tajikistan, where thousands of hectares of land were used to pay off loans from China.

Dominguez also said that while countries use ODA to influence, it is up to the government how to take advantage of opportunities.

He also reiterated that all projects funded through ODA have economic returns.(READ: Philippines 'extra careful' with China loans – NEDA)

"We are not doing projects that will not pay for themselves," the finance chief said.

So far, 8 out of 75 big-ticket projects under the government's Build, Build, Build program are slated to be funded by China. One of those has started construction. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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