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May 31, 2017 @ 15:57

No friendly discount? Pernia admits China’s loans are 3 times more expensive than Japan’s ODA


President Rodrigo Duterte considers China a friend but it doesn’t mean President Xi Jinping will give the country a discount on its borrowings.

Socioeconomic Planning Secretary Ernie Pernia told Malacañang reporters that China would charge two to three percent for its official development assistance (ODA) loans granted to Duterte during his visit with Xi.

In contrast, Japan Prime Minister Shinzo Abe would only charge less than one percent for its ODA loans.

“Japanese ODA is less than one percent. So it’s really the cheapest you can get. Long grace period, long, you know, long repayment period. So, it’s going to be easier to incur,” said Pernia.

“China, I think it’s on the order of two — two to three percent. We are not sure yet. It’s still being, you know, it’s still being discussed with the DOF (Department of Finance) — between DOF and Ministry of Finance or MOFCOM in China,” he added.

After making a lot of hoopla over the $33 billion total loans obtained by the Philippines from China and Japan during Duterte’s state visits, Pernia admitted the actual amount that the Philippines would be getting would be smaller.

Pernia said that these loan projects would only materialize if Congress would increase government revenues to allow it to incur more debt.

“We’ll have to go slow on, you know, accepting or entering into ODA, you know, agreements with China‎ because we need to balance, you know, spending, indebtedness on one hand and capacity to pay and service the debt on the other hand,” said Pernia.

“So instead of 10 projects, maybe just one or two. So it’s not going to be the golden age of infrastructure. It will be the bronze age maybe of infrastructure or maybe dark age — dark age of infrastructure,” he added.

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  • Chem Po

    “…if Congress would increase government revenues to allow it to incur more debt.”
    Pray clarify what is this? More revenues means less borrowing is’nt it? So more taxes means more revenue so less debt is’nt it? Or does the govt see money coming in fro loans as revenue?

    • Jose Montero

      I think Pernia meant increasing ceiling for borrowings as it impacts deficit spending.

  • Rygee

    Yan na nga eh ginogoyo na tayo ng Tsina

  • Master of Unlocking

    Some “friendship” this is turning out to be.

  • Patrizia Paige

    in other words, china is not being a friend. it is just doing business. sly chinese!

  • Carmencita Fiel

    Is it wise to borrow from China?

  • potshooter

    asan na mga kaDDS? anuna? 33billion in (not) soft loans daw. HAHAHAHAHAHAHAHAHA. utong uto naman mga supporter ni pdutz

  • lukeloveslife

    Nadutete na naman ang mga dutertards hahaha

  • etokus

    Ayaw din sa EU grants na walang bayad. Gutom kasi walang tongpats.

  • pat3k

    buti sana kung pera ni loko ang pambabayad

  • Bukang Liwayway

    NEW DELHI — The Philippines could end up in hock to China if it is not careful about entering into investment and infrastructure deals with Beijing, according to an Indian think tank.
    Hardeep Puri, chair of India’s Research and Information System for Developing (RIS) Countries, warned that the Philippines should be wary of China-funded projects to avoid falling into the same debt trap that has bedeviled other countries that have received massive Chinese loans and investments such as Laos and Sri Lanka.

    Read more:
    Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook

  • Steven Rogers

    China is not lending to help the Philippines. China is lending to establish markets for ts own contractors and industries, who have been stranded bu China’s domestic construction slowdown. They don’t care if a project is viable or will produce economic benefits, they just want to sell Chinese steel, cement, and other materials, and keep Chinese contractors and laborers working.

    • Gerardo Vergara

      It was the sad experience of Venezuela, Bolivia and SriLanka to have fallen into China;s debt trap. It was hailed as a rich country but it doesn’t mean it had no problems with unemployment that it wants to solve by bringing them to the borrowing country.

      • Steven Rogers

        China has serious economic problems. They can’t keep building “ghost cities” in China, and the only way to keep their construction and primary materials industries alive is to use their money to force their way into foreign markets where they can dictate their own terms, even down to employment of Chinese labor. Will those laborers go back to China, or will they settle here? Abangan…

  • Ady Abarro

    This maybe a part of China’s Belt and Road Initiative…… BEIJING — China is aiming to re-create Marco Polo’s ancient “Silk Road” that connected Europe to Asia.

    But instead of the camels and caravans that transported spices and silk hundreds of years ago, a $1.4 trillion network of modern trading routes would be built.

    On Sunday, Chinese President Xi Jinping will host 28 heads of state at the opening of a two-day summit focusing on the so-called “Belt and Road” initiative.

    Analysts suggest the project could shift the center of global economy and challenge the U.S.-led world order.

    Image: Chinese President Xi Jinping
    Chinese President Xi Jinping Peter Klauzer / Pool via EPA, file
    Beijing hopes the gathering will rally international support for the plan.

    Xi’s colossal program is 11 times the size of the U.S. Marshall Plan, which reconstructed Europe after World War II.

    It envisions new roads, high-speed rail, power plants, pipelines, ports and airports and telecommunications links that would boost commerce between China and 60 countries in Asia, Europe, the Middle East and North Africa.

    Among Xi’s guests will be Russian President Vladimir Putin, as well as the leaders of Turkey, Italy, Pakistan and the Philippines. A minister from reclusive North Korea will also attend.

    The U.S. delegation is led by Matt Pottinger, a special assistant to President Donald Trump and senior director for East Asia on the National Security Council. His visit to observe the summit was only announced Friday. And surrounded by heads of state, Pottinger’s relatively low position raises questions about how seriously the Trump administration is taking the project.

  • Iscala Nenita

    Eversince lubog ang Pinoy sa utang, pero nasaanan napunta? Nakita ninyo ba? This time, makikita ninyo kung saan mapupunta yun. Angal agad kayo ng angal para kayong kalahi ni Trillanes.

    • Regie M. Picayo

      Eh saan ba naman mapupunta? Binasa mo ba ang article? Eh di ba maliwanag pa sa buwan na hindi nga siguradong maiimplementa yang BUILD, BUILD,BUILD! na yan kung wala rin namang kapasidad ang gobyerno to pay those loans? There is a need for congress to increase revenues before it could incur more debts according to Pernia. Meaning baka isa or at the most 3 projects lang ang maimplement. Magyabang pa kayo tulad ng presidenteng demonyo ewan ko lang kung saan pupulutin ang Pilipinas?

  • Gerardo Vergara

    1 balita noon last year, 6%. Sa Japan na lang sana na hindi pa magdadala ng mga low level workers tulad ng ginawa ng China sa Venezuela na nung bumagsak ang presyo ng oil, iniwang nakatiwangwang ang mga projects. Hirap magbayad ng utang ang bansa kaya hirap din ang mga.tao kahit sa pagkain dahil walang pambayad sa imported items. Ganyan ang aabutin natin kung hindi pipigilan ng Kongreso si Digong na basta lang uutang na magpapahirap sa susunod na henerasyon.

  • Modie

    Not an accurate report. They should listen to Sec Diokno. More accurate.

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