CLARK, Pampanga -- Finance Secretary Carlos Dominguez III on Monday stressed that the country is not falling into a debt trap even as it takes more loans from foreign governments to fund its massive infrastructure program called “Build, Build, Build.”
In his speech during the consultation event with the private sector and other stakeholders, dubbed “Sulong Pilipinas”, here, Dominguez said allegations that the current administration is putting the country into deep pit is “totally unfounded.”
He explained that the loans extended by foreign countries, particularly by Japan and China, are “soft loans at the lowest possible interest rates and the longest possible term.”
Citing Department of Finance (DOF) data, Dominguez said the estimated debt of the Philippine government to the Chinese government by end-2018 will be about 0.65 percent from the current 0.11 percent.
During the same period, share of loans from Japan will increase to about 8.90 percent from the current 3.17 percent.
Including those programmed until 2022, loans from China will account for 4.5 percent of the Philippines total debt while those from Japan will be around 9.5 percent.
Japan and China have committed to fund some the 75 priority projects of the Duterte administration.
The Japan International Cooperation Agency (JICA) is partly financing the Metro Manila subway project while China will provide a loan for the construction of the Kaliwa Dam in Quezon province.
Dominguez pointed out that “there is no danger of us being drowned by Chinese debt.”
“We borrow with great prudence, aware that it is the taxpayer who ultimately pays for the debt,” he said.
“We always keep in mind that the money we borrow comes from the taxes dutifully paid by the people of the countries that had continued to generously support us, thus, we take care that the funds we borrow are wisely-used and produce sufficient economic benefits to make the debt service easier down the road,” he added. (PNA)
