Philippine Daily Inquirer

$9-B infra funding to come from Japan

Budget chief says PH ‘very careful’ about getting loans from China

- By Ben O. de Vera @bendeveraI­NQ

The Duterte administra­tion’s “independen­t” foreign policy is auguring well for its ambitious “Build, Build, Build” program as China and Japan are pitching to finance big-ticket infrastruc­ture and infuse $9 billion each in funding to the Philippine­s, Budget Secretary Benjamin Diokno said Monday.

Diokno reiterated in a media forum that the Philippine­s was very careful in securing financing from China as a top US official last week warned of “opaque” loan terms from the mainland.

“In our case, we’re very careful. We have very rigorous processes. Neda (the state planning agency National Economic and Developmen­t Authority) evaluates” projects as well as the appropriat­e financing schemes for each, Diokno said.

The budget chief added that the Philippine government chooses the projects it wanted to roll out—“it’s not dictated by other government­s, so it’s not supply-driven; it’s demand-driven.”

Following Finance Secretary Carlos Dominguez III’s statement last Sunday that the government would review Chinese financing offers after US Vice President Mike Pence’s warning issued during the Asia-Pacific Economic Cooperatio­n meeting in Papua New Guinea, Diokno said the Philippine­s would “shop around for the best terms.”

“That’s the rationale for the review,” Diokno said as he noted that Japan, for instance, offered lower interest rates for its loans.

In fact, Philippine and Japanese economic officials will hold their sixth high-level joint committee meeting on infrastruc­ture developmen­t and economic cooperatio­n on Wednesday “to discuss the processing of new concession­al loan agreements that would provide the Duterte administra­tion’s ‘Build, Build, Build’ program with additional financing support from Japan,” the Department of Finance said in a separate statement also on Monday.

Dominguez, who heads the Duterte administra­tion’s economic team, will chair the Philippine side. Hiroto Izumi, who is special adviser to Japan Prime Minister Shinzo Abe, will lead the Japanese delegation.

Diokno noted that the meeting with the Japanese would happen a day after China President Xi Jinping’s visit to the Philippine­s.

The Budget chief said such was “consistent with the President’s independen­t foreign policy.”

“We’re friends to all, so we’re getting support from abroad,” he said.

Despite increasing borrowings from overseas, Diokno said the country was not falling into a “debt trap” as economic growth still outpaced the growth in loans being secured by the government.

He said the debt-to-gross domestic product (GDP) ratio stood at about 40 percent at present and was declining.

The share of debt to GDP was projected by the government to fall further to just over 38 percent by 2022 as “we will outgrow our debt accumulati­on,” Diokno said.

Newspapers in English

Newspapers from Philippines