Metro Manila (CNN Philippines, September 15)— A lawmaker is urging the government to refrain from borrowing more from China, as he warned of a “debt trap” that other nations had experienced when they were unable to pay back their loans to the economic powerhouse.
Speaking to CNN Philippines on Tuesday, Senator Ralph Recto said he had filed a resolution asking the executive department to avoid increasing the country’s debt exposure to the East Asian giant.
“I think that we should not be incurring more debts from China,” Recto said in interview with The Source. “I don’t think we should be borrowing more from China considering everything that’s happening.”
“Because of the pandemic, our revenues have gone down and we will be borrowing more. China already has a track record of lending out money to many countries, and we’ve seen what has happened to many countries. There is what you call a debt trap as well,” he warned.
Some sectors and officials had also earlier expressed concern that what happened to countries like Sri Lanka might be repeated in the Philippines. In December 2017, Sri Lanka handed over to China its Hambantota port after failing to pay a loan to Beijing which funded the construction of the facility.
Earlier, Recto likewise called for the blacklisting of foreign companies involved in reclamation activities in the West Philippine Sea which only create “tension” in the region.
“I’m not against the Chinese. It’s just unfortunate that they have taken the position of creating instability in the region by putting up all of these facilities in the West Philippine Sea,” the lawmaker explained.
In 2018, both the Foreign Affairs Department and China itself had assured that the Philippines would not be falling into a so-called “debt trap.” The Chinese Foreign Ministry had said this was impossible as its loans to the country accounted for only a limited portion of the Philippines’ foreign debt.
Data from the Budget Department as of August show that the Philippines’ debt would spike to over ₱10 trillion by December amid the coronavirus pandemic.