Philippines has not been put at a “disadvantage” when it entered into a loan arrangement with China, Malacañang on Monday, March 11, guaranteed Malaysian Prime Minister Mahathir Mohamad.
Presidential Spokesperson Salvador Panelo issued the statement after Mahathir advised the Philippines to carefully deal with loans from China.
In a Palace briefing, Presidential Spokesperson Salvador Panelo stressed that the Philippines had made careful evaluation before forging loan deals with China.
“Of course, we will take his (Mahathir) advice,” the Palace official said.
“The economic managers are evaluating all kinds of loans that we are having with Chinese government… I think the economic managers have already explained we are not at a disadvantage,” he added.
Mahathir, who paid an official visit to the Philippines last week, cautioned the Duterte government to be careful with loans from China so as not to fall into Beijing’s supposed “debt trap.”
Malaysia, under Mahathir’s leadership, cancelled last year a number of Chinese-funded projects worth $22 billion that was previously awarded to his predecessor, former Malaysian Prime Minsiter Najib Razak.
President Rodrigo Duterte, who continues pushing for his ambitious “Build, Build, Build” infrastructure program, has sought China’s help for funding for the swift implementation of his key infrastructure projects.
Mahathir, in a Philippine television interview last week, said the Philippines should avoid suffering from unsustainable debt by accepting Chinese 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,” the Malaysian leader warned.
The Philippines has entered into nine loan agreements with other nations, including two from China, as of last week, the Finance department has noted.