Senate Minority Leader Franklin M. Drilon on Sunday backed calls to review the loan agreements that the Philippines signed with China, including the Chico River Dam and the Kaliwa Dam.
“I support the proposal to review the various loan agreements with China. It is not unusual for loan agreements to be reviewed. It’s part of the check and balance,” Drilon said in an interview over radio station DZBB.
A Senate panel, headed by Sen. Sherwin Gatchalian, is scheduled to review the controversial China-funded projects.
Drilon cited the country’s previous experience when then former President Benigno Aquino III reviewed the Northrail project, which he subsequently cancelled when it was found out to be grossly disdvantageous to the Philippine government.
The aborted North Rail project ($421 million), which Drilon fiercely opposed for being grossly overpriced, and the controversial NBN-ZTE deal ($329 million) were two of the biggest deals the country signed with China during the Arroyo administration.
“Let’s find out if there are indeed stipulations which are too favorable to China, because many were saying the terms are very disadvantageous to the country,” Drilon said.
Drilon stressed: “Let us review and expose the terms. We owe it to the public, because it is the public, through their taxes, who will pay the loan.”
Drilon said that a review is important in order to ensure that it will not fall into the so-called “debt trap” with China, as what happened with some countries, including Sri Lanka and Ecuador, which are having difficulties paying their loan obligations with China.
“Ang importanteng tingnan ‘yung tinatawag na debt trap, kasi baka pagdating ng panahon hindi na makayanang bayaran ito,” stressed Drilon, citing warnings by other countries such as Malaysia and the United States about the possibility of the Philippines falling into a “debt trap” with China.
Malaysian Prime Minister Tun Dr Mahathir Mohamad cautioned the Philippine government over falling into a “debt trap” when he visited the country early this month. In 2018, the Prime Minister cancelled two major infrastructure projects by Chinese companies in Malaysia.