China denies seeking PH resources as collateral

MANILA, Philippines – China’s foreign ministry denied that the country has asked for natural resources as collateral in its loans to the Philippines.

In a press conference on Friday, March 9, Chinese Foreign Ministry spokesperson Geng Shuang responded to a Chinese scholar’s take on these loans.

Zhuang Guotu of the Center for Southeast Asian Studies of Xiamen University told Chinese newspaper Global Times that among the repayment terms in Chinese loans to the Philippines is to have natural resources as a form of collateral. 

“By convention, parts of China’s concessional loans require the borrowers to use certain sovereign credit as collateral, which is an international practice,” Geng said. 

He added: “China has never asked and will never ask relevant countries to use natural resources as collateral in loan agreements. In this vein, our assistance and support to the Philippines are provided with no strings attached.” 

Geng also said that China “will not link the South China Sea issue with bilateral economic and trade cooperation projects.” (READ: [OPINION] What scares me the most about China’s new, ‘friendly’ loans)

In July 2016, the Philippines won a case against China at the Permanent Court of Arbitration, affirming Manila’s rights over the West Philippine Sea, the part of the South China Sea that is owned by the Philippines. But Beijing refuses to recognize this ruling.

“China stands ready to work with the Philippines to follow through on the consensus between the two leaderships and stay committed to properly resolving differences through dialogue and consultation, ensuring the sound and steady development of bilateral relations and jointly upholding regional peace and stability,” Geng added.

Since the “turnaround” of relations between China and the Philippines in 2016, Geng said that China “has been actively helping the Philippines develop its economy and improve people’s livelihood.” 

He also said they have given “full support” to President Rodrigo Duterte’s “Build, Build, Build” infrastructure program.

“The Chinese government and financial institutions have also provided financing support to the Philippines, including preferential buyer’s credits, and assisted the Philippines in issuing the panda bonds, which effectively ensured the implementation of relevant projects,” Geng said. – Rappler.com