editorial.no.12

President Xi Jinping of China (right) with President Rodrigo Duterte of the Philippines in Beijing last October.


THE Duterte Administration has been mouthing that its friendly overtures with China and Russia are aimed at establishing an independent foreign policy for the native country.

The question we and other observers are asking is whether it is really independent or dependent foreign policy in the making?

If Venezuela recklessly entered into an “oil-for-loan” debt arrangement with China and Russia, the Philippines could be entering into an irresponsible “West Philippine Sea-for-loan” unconscious arrangement if the Duterte group will not be careful in reviewing the loans from Communist China.

Our online editorial explains thoroughly our reservations.

We are printing it below.

Duterte’s Chinese debt-driven economics

The biggest infrastructure spending in the Philippines since the debt-driven Marcos years in the 70s is soon to happen again under the Duterte Administration — by incurring huge debts, mostly from China.

Forbes Magazine reported last week that according to Philippine Secretary of Budget and Management Benjamin Diokno, some U.S.$167 billion would be spent on infrastructure during President Duterte’s term.

That could increase current Philippine national government debt of approximately $123 billion, to $290 billion.

But that does not include interest.

High rates of interest that China, the most likely lender, could impose on the new debt could balloon it to over a trillion U.S. dollars in 10 years.

Duterte and his influential friends and business associates could each benefit with hundreds of millions of dollars in finders fees, of 2-7%, for such deals, according to same report.

More likely according to Forbes, at 10% interest the new debt could go up to $452 billion, bringing Philippines’ debt: GDP ratio to 197%, second-to-worst in the world.

Debt-bondage might be the end-result of this type of economic plan.

If and when that happens, China could demand whatever it wants in the West Philippine Sea issue.

University of the Philippines Professor Randy David has suggested to the public servants at the National Economic and Development Authority who will review the China deals prior to approval, to read Deborah Brautigam, a close observer of China’s aid activities in Africa.

Her book, “The Dragon’s Gift,” according to David, is the most comprehensive account of the nature and consequences of Chinese aid.

Soon, we will know what arrangements President Duterte made with the shrewd Putin.

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