Budget chief denies gov't uses territory as collateral for China loans

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Budget Secretary Benjamin Diokno.

Metro Manila (CNN Philippines, November 21) — Budget Secretary Benjamin Diokno denied allegations that the Philippines agreed on loans with China under "onerous conditions."

"That's coming from the alarmist group. There's no such thing as onerous conditions. We were smart. We're not like other countries. We don't mortgage our territories for a loan that is as straightforward as a railway system," Diokno said in a press briefing Wednesday.

This was in response to Filipino think tank IBON Foundation's statement on Monday, claiming the Duterte administration is brokering questionable deals with Beijing. The think tank said the Philippines is "virtually giving up" its sovereignty if it submits to China's terms.

But Diokno said government only allows loans for projects that would pass the cut-off of 10 percent for economic rate returns.

IBON Foundation, in its statement, claimed China requires disputes surrounding the loan agreeements be settled at the China International Economic and Trade Arbitration Commission (CIETAC).

Diokno disputed this.

"Usually, when you sign a loan, in case of arbitration, you assign that to a third party. Like, say Singapore, if there's a court there. You do not say it will be resolved by a Chinese court," Diokno said.

The administration's ties with China were reaffirmed after Chinese President Xi Jinping went to the Philippines for a state visit Tuesday. Over 20 deals were inked between the two countries.