The Chinese government does not set any debt trap for developing countries when it extends loans to fund infrastructure projects, China’s top political advisory body said Saturday.
At a press conference, Guo Weimin, spokesperson of the second session of the 13th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), said extending Chinese loans to developing countries facilitates infrastructure projects that are expected to bring development and boost the economic growth of these nations.
“Chinese investments only account for a very small share of their total debt. And our projects are mostly infrastructure, which can support the long-term development of those countries,” Guo said.
“Yet some say, this is a great debt trap. But this doesn’t make sense,” he added.
In the Philippines, China is financing the $62 million Chico River Pump Irrigation Project, which aims to water around 8,700 hectares of agricultural land to benefit more than 4,300 families in the northern part of the country.
Data from the Philippines’ Department of Finance (DOF) also showed that the country’s projected debt to China by 2022 will only account for 4.5 percent of the total debt. This is lower compared to the debt to Japan at around 9.5 percent of the government’s total debt by 2022.
The DOF also said the Philippines’ stable fiscal condition will be able to pay its obligations.
Philippine government data also showed that the country’s debt-to-GDP ratio in 2018 was estimated at 41.9 percent, lower than its 42.1 percent target for the previous year.
“Actually the debt problem of some developing countries is complicated. It is a product of history,” Guo said.
Malacañang on Sunday shrugged off the challenge of Bayan Muna party-list Rep. Neri Colmenares to have a debate on the irrigation project deal between the Philippines and China.
Presidential spokesman Salvador Panelo said he has “better things to do” than to grant Colmenares’ “desperate” wish to be in the limelight to help his run for the Senate.
“Challenging a publicly visible government official to a debate attracts media attention. Surely Mr. Neri Colmenares knows how to grab at a media operation to improve on his fledgling candidacy,” Panelo said in a statement.
“He should be commended for that, but I have better things to do than to provide him the forum he desperately needs,” he said.
Last week, Colmenares questioned the country’s 20-year loan for the Chico River Pump Irrigation Project, saying it was “onerous” in its entirety and highly favored Beijing.
Colmenares said a “dangerous component” of the agreement could allow China to take control of the country’s patrimonial properties should the Philippine government fail to pay the loan.
READ: Palace slams Colmenares for questioning China deal
Panelo previously said Colmenares was merely “politicizing” the country’s enduring ties with Beijing, arguing that the Duterte administration’s economic managers have carefully studied the agreement.
“It is clear that the matter has been studied at length by our economic managers, particularly the DOF, unlike Mr. Colmenares who has only shown himself to be ignorant of the intricacies of finance,” Panelo said.
In response, Colmenares hit back at Panelo for accusing him of making a publicity stunt out of the loan agreement. He then challenged Panelo to a debate.
