Palace: PH unlikely to go bankrupt over loans from China
The Philippines is unlikely to go bankrupt over the loans to be forged with China for certain infrastructure projects, an official of the Department of Finance (DOF) assured the public Wednesday.
Finance Assistant Secretary Paola Alvarez maintained there was no need to worry since the government has identified revenue sources, such as tax reform measures, to pay for foreign loans.
“One of the reasons why we also did tax reform or TRAIN (Tax Reform for Acceleration and Inclusion) 1 is so that we can assure that we have healthy stream of revenue,” Alvarez said during a Palace press briefing.
“This is one of the reasons why we would be different from other countries, like for example Malaysia, because we will not be bankrupt because we have already planned how to pay for these loans,” she added.
Alvarez made the remarks after Malaysia decided to cancel two major Chinafunded infrastructure projects worth over $20 billion due financial constraints.
Malaysian Prime Minister Mahathir Mohamad reportedly said Malaysia could not afford the projects, including a railway and two gas pipelines, saying the debtridden nation might become bankrupt if it is not careful.
Alvarez said President Duterte’s economic managers have traveled to China to finalize the negotiations for the loans to support some infrastructure projects in the country.
“I don’t think we have to worry because iyong set up naman nila for Malaysia would be different from that from the Philippines,” she said.
“So when they come back then we will ask them how the meeting went, so I think you’ll get more information on that,” she added.
The economic team is expected to meet with Chinese officials this week on the progress of various projects for Chinese loan financing.
Among the infrastructure projects are the Chico River Pump Irrigation Project, New Centennial Water Source-Kaliwa Dam Project, the Philippine National Railways’ South Long Haul Project, and the Davao-Samal Bridge Construction Project.