DESPITE US Vice President Mike Pence’s warning to Indo-Pacific countries not to compromise their sovereignty in exchange for Chinese loans, the Philippine government remains keen on joining China’s “Belt and Road” initiative (BRI).
Both Finance Secretary Carlos G. Dominguez III and Trade Secretary Ramon M. Lopez said committing to the BRI will not compromise the country’s sovereignty.
“We have reviewed the Belt and Road agreement and, quite frankly, I don’t think it’s opaque. It’s quite clear to me that this is a win-win situation for everybody,” Dominguez told reporters in news briefing in Papua New Guinea
on Sunday.
“As to compromising sovereignty, I don’t see how that can be because you enter into it freely and it’s something that is quite transparent,” he added.
Lopez agreed with Dominguez and said it is a “good idea” to participate in the China-led initiative, especially since the Philippines is in a good position to acquire more foreign debts carrying favorable terms.
“Of course, our government and the Department of Finance and other agencies have reviewed the terms that will be best for us. We won’t go into it if those terms are unreasonable and worse than other sources,” he said.
“Based on the numbers also from what I remember, we are not overleveraged. In other words we can really absorb more debts as long as the terms are good,” Lopez added.
Foreign Affairs Secretary Teodoro L. Locsin Jr. earlier said a memorandum of understanding on the BRI will be signed by President Duterte and Chinese President Xi Jinping, who will arrive in the Philippines on November 20.
Xi’s state visit is the first made by a Chinese president in 13 years. The visit is expected to further strengthen bilateral relations between the Philippines and China.
With an announced investment of as high as $8 trillion, the BRI is a massive trade and infrastructure project that aims to link Asia, Europe and Africa, covering at least 68 countries.
In a strongly worded speech without mentioning China on Saturday, Pence urged countries not to fall into the trap of Chinese debt diplomacy and instead choose the better option of American development financing.
“We don’t drown our partners in a sea of debt. We don’t coerce or compromise your independence. We do not offer a constricting belt or a one-way road,” he said in a speech.
Pence also described some infrastructure loans across the Indo-Pacific and the wider world as “opaque at its best.”
“The projects they support are often unsustainable and of poor quality. Too often they come with strings attached and lead to staggering debt,” he said.
“Let me say with great respect to all the nations across this wider region and the world: Do not accept foreign debt that could compromise your sovereignty. Protect your interest. Preserve your independence. And just like America, always put your country first,” Pence added.
In August the Malaysian government canceled a total of $22-billion Chinese-funded projects linked to BRI to avoid plunging the country into debt.