Senator Leila M. de Lima has expressed serious concerns over the US$167-billion infrastructure project of the Duterte administration that would be financed through foreign loans, mostly coming from the Chinese government.
In filing Senate Resolution No. 377, De Lima called for a Senate probe to look into the terms of any loan agreement with China that may either put the country in dire debt or force the country into commitments undermining the Constitution or its sovereignty.
“While there is a need to stimulate the economy, there is an even greater need for our economic managers to exercise extreme caution before advising our President to enter into any loan agreement of this magnitude,” she said.
“Lest we end up with a debt that our children, our children’s children, and even several generations thereafter will not be able to repay, and with commitments that would violate the Constitution or undermine our sovereignty,” she added.
De Lima cited separate reports from Forbes Magazine and Reuters warning about the danger of long-term onerous indebtedness among allied countries under the China-espoused “Belt and Road Initiative” (BRI).
BRI aims to connect countries of Asia, Europe, and Africa with each other, primarily through infrastructure projects that are to be financed, in part or in whole, by China, such as ports, roads, railways, and bridges.
The Senator from Bicol, however, pointed out that some countries, such as Mongolia, Venezuela, and Sri Lanka had to resort to desperate measures to renegotiate their loans with China.
For instance, she noted that Mongolia had to sell coal to China for only 11% of the international market price, Venezuela had to ask for more onerous loans from Russia, and Sri Lanka had to offer debt-for-equity swaps to China over infrastructure projects.
“The principles of transparency and accountability dictate that the terms of any loan agreement that have the potential of undermining our sovereignty and of mortgaging our children’s future be subjected to extreme scrutiny,” she said.
“It is the duty of Congress to keep the Executive Department in check, through the investigation of, and meaningful legislation on financial and economic policies that could affect our country well beyond the current administration,” she added.
The Duterte administration is reportedly banking on the financial support from foreign donors to fund its massive USD167-billion infrastructure program, around USD9 billion of which are to be funded through loan by China under the BRI.
De Lima has also filed a similar measure, Senate Resolution No. 222, which calls for a Senate investigation into at least 17 investment deals worth of billions of dollars signed during President Duterte’s state visit to China last year.
She recalled two separate investigations conducted by World Bank (WB) in 2009 and 2011 which found at least seven Chinese firms and one individual to have engaged in “collusive scheme designed to establish bid prices at artificial, non-competitive levels.”
Some of these Chinese firms and their subsidiaries have been debarred from bidding or were found to be ineligible to engage on future WB-financial contracts until 2017, she noted.