Government to 'make haste slowly' in deals with China

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Metro Manila (CNN Philippines, May 30) —  The gung-ho approach of the government when it comes to infrastructure spending takes a backseat when deals with China are involved, one of the administration's economic managers said.

Socioeconomic Secretary Ernesto Pernia, during CNN Philippine's economic forum "Building for the Future", said that the government is aware of the possible pitfalls of getting into economic deals with China.

"We read a lot of reports from Sri Lanka, African countries, Pakistan. We are well aware of that," Pernia said in response to a question by CNN International Correspondent Andrew Stevens on whether or not the Philippines was walking into China's "debt trap".

Last February, U.S. Secretary of State Rex Tillerson warned that African countries like Djibouti may be falling into a "debt trap" with China over its infrastructure projects.

An independent study from Harvard University identified countries that are vulnerable to China's "debtbook diplomacy", in which the Eastern giant uses debts to "acquire strategic assets or political influence over debtor nations."

These countries include Djibouti, Kenya, Pakistan, Sri Lanka, Laos, Myanmar, Malaysia, Papua New Guinea, and the Philippines.

READ:  China using 'debtbook diplomacy' to spread its strategic aims in Asia Pacific


According to Pernia, who is vice-chairperson of the National Economic and Development Authority (NEDA) Board that approves big-ticket infrastructure projects by the government, the only project that is fully-funded by China is a small irrigation project in Tuguegarao City.

"We have to make haste slowly in terms of Chinese-funded projects so we know every step of the way. We know what the pitfalls are," Pernia said.

However, earlier this month the Department of Transportation said that they are considering having China fully fund the multi-billion peso Mindanao Railway project.

"Since China already expressed intent to finance the future phases of Mindanao Railway, there is concern that if Phase 1 is not implemented by China, it will be more difficult to get China's support for the much longer future phases of the Mindanao Railway Project," the agency said.

READ: DOTr bares plans for China to fund entire Mindanao Railway project

Transport Secretary Arthur Tugade, who was also a speaker at the forum with Pernia and the other economic and infrastructure managers of the administration, did not dispute his fellow cabinet member's statement on China.

In a press conference last week, Presidential Spokesperson Harry Roque said that the government is also considering for the rehabilitation of Marawi two Chinese firms that have previously been blacklisted by the World Bank.

READ: Rebuilding Marawi: Gov't giving Chinese firms once blacklisted by World Bank a chance