A Chinese scholar has been quoted in a news report suggesting that the Philippines’ natural resources could serve as collateral for Chinese loans.
Zhuang Guotu, head of Xiamen University’s Southeast Asian Studies Center, told the state-run Global Times that “Loans are usually accompanied by repayment agreements, which use certain natural resources as collateral”.
Zhuang also said: “China’s infrastructure capability leads the world and as a result many countries and regions are willing to cooperate with China.”
The Philippines has turned to China to help fund President Duterte’s planned multi-trillion “build, build, build” infrastructure plans.
However, critics have warned of a “Chinese debt trap” and pointed to the example of Sri Lanka — which was forced to lease its Hambantota port to a Chinese operator for 99 years to pay off a debt to Beijing.
Filipino maritime expert Jay Batongbacal was among those alarmed by the article, warning that using natural resources as “collateral” was like taking on a mortgage.
“Who knows which among the 7,641 islands are being ‘mortgaged’? Can you imagine what if the Cordilleras are foreclosed? Or the Visayan Sea? This boggles the mind. No wonder Sri Lanka got shafted,” Batongbacal wrote on Facebook.
Former National Security Adviser Roilo Golez also described Zhuang’s comment as “disturbing and alarming”.
“Our natural resources as collateral! Our family jewels in hock as a condition for the Chinese loans! Is this correct? Is this the reason why joint exploration is being pushed hard? The government, Malacañang, DOF (Department of Finance) and NEDA (National Economic and Development Authority) must clarify this and say it isn’t so!” Golez wrote in a blog post.
In a news conference on Wednesday (March 7), presidential spokesman Harry Roque dismissed the Global Times piece as mere “tsismis” (gossip).
He said: “I will not use as a Chinese newspaper as a primary source to establish a fact. I will look for the primary document, where is that agreement.
“If there is an agreement, I will comment. And since there is no formal document on the matter, I will say that is just gossip.”
As we recently reported, President Duterte has been pushing for joint exploration with China in the South China Sea, despite ongoing disputes about sovereignty.