Visiting Malaysian Prime Minister Mahathir Mohamad on Friday warned against borrowing money from other countries for projects, saying it is better for countries like the Philippines to grow within its own means.
In an interview with GMA resident analyst Richard Heydarian, Mahathir was asked about his thoughts on dealing with foreign investments in light of the Philippines’ aggressive borrowing to finance 75 projects aimed at boosting the economy and making the country more competitive.
READ: Government debt rose to P7.5 trillion as of January
“If you cannot repay, you’ll come under the influence or direction of the lender… If you cannot pay your debt, you find yourself subservient to the lender,” Mahathir said.
“It is better for us to grow within our means. If you have the capacity to borrow, it must be because we can repay. But when you borrow money which we cannot repay, you are endangering your own freedom.”
The Malaysian leader also vowed to extend help to the Philippines in resolving insurgencies in Mindanao, saying they only “weaken nations.”
“We know that such insurgencies only weaken nations. Only peace brings about wealth and prosperity. As long as there is result to conflicts and wars, there will be no development,” he said.
President Rodrigo Duterte and Mahathir reached an agreement on security cooperation after their expanded bilateral meeting at Malacañang on Thursday.
The Malaysian PM left the country at 3 p.m. yesterday.
Meanwhile, Finance Secretary Carlos Dominguez has assured the public that the Philippines is not drowning in debt to China.
He said the government had been screening its debt to China using the same standards as with any other loans.
The Duterte administration has committed to invest over P8 trillion until 2022 on the 75 projects. This pushed the country’s total debt to a new high of P7.293 trillion in 2018.
In relation to Chinese investments, Mahathir, the world’s oldest national leader, reiterated that the influx of foreigners to one country might have adverse effects.
“We don’t mind them setting up plans to produce goods. But when it comes to developing whole towns and cities and probably bringing their people to live there, that may have a very bad political effect on the country,” Mahathir said.
Earlier reports said at least 200,000 Chinese had flocked to the Philippines since 2016, many of them employed by online gaming firms that cater to Chinese players.
READ: Government debt jumped by P758 billion to reach P7.2 trillion in November
READ: Foreign reserves rise to 28-month high of $82.9 billion
