The Philippine government will take the advice of Malaysian Prime Minister Mahathir Mohamad on acquiring loans from China, Malacañang said Monday, adding its economic managers have given an assurance that the country will “not be at a disadvantage” as a result of it.
Presidential Spokesman Salvador Panelo made the remark after the Malaysian leader said the Philippines should be wary about securing loans from China.
Mahathir said the Philippines should learn from the mistakes of other countries that suffered from unsustainable debt by accepting Beijing’s infrastructure investments.
“If you borrow huge sums of money from China and you cannot pay―you know when a person is a borrower he is under the control of the lender. So, we have to be very careful with that,” Mahathir told ANC in an interview on Thursday.
Mahathir, recognized as the most senior statesman in Asia, recalled Malaysia’s own experience with the China-funded infrastructure projects, scrapping them in the process as he viewed them as “unfair.”
Meanwhile, Panelo said the Palace welcomed Mahathir’s advice.
“Of course, we will take his advice and the economic managers are evaluating all kinds of loans that we are having with the Chinese government,” Panelo told reporters.
He said the economic managers had assured them that the Philippines remained “very careful” in accepting loan offers from China.
“I think the economic managers have already explained that we are not at a disadvantage,” Panelo said.
Just last week, the Palace defended the country’s 20-year loan deal with China to finance the Chico River Pump Irrigation Project. Critics said the deal with Beijing was “onerous” in its entirety and had a “dangerous component” that highly favored Beijing.
But Panelo said the economic team had studied the matter at length and ignored the concerns over the deal.
The Department of Finance says the Philippines has already executed nine loan agreements with other countries, two of which are from China.