Manila: Philippine officials on Tuesday assured that no part of the country had been used or will be used as collateral for loans secured from the Chinese government.
Earlier, Supreme Court Associate Justice Antonio Carpio warned that the Philippines stands to lose a substantial part of its territory in the South China Sea if the country fails to fulfil its loan obligations with China.
The government in Manila has ostensibly used as collateral the rights to exploit and explore oil and gas rich territories in the South China Sea to obtain a P4.3 billion (Dh300.57 million) loan with China for the Chico River Pump Irrigation Project.
The Chico River Pump Irrigation Project), the first flagship infrastructure project to be financed by China under President Rodrigo Duterte’s ambitious “Build, Build, Build” programme is expected to be completed in three years.
But Finance Secretary Tony Lambino flatly denied that contrary to Carpio’s statements, the government did not pawn any part of its territory for the loan.
“We did not declare any collateral in this loan agreement,” Lambino said in a radio interview by dzMM.
Once finished, the Chico River project will provide a stable supply of water to around 8,700 hectares of agricultural land in northern Luzon’s Kalinga and Cagayan provinces.
The Philippines had been wary of China’s “carrot and stick” approach in its overseas assistance loans as shown by the experience of countries like Maldives, Sri Lanka, among others.
Lambino said the Philippines will not give up its rights to its territory in the South China Sea.
He said that in the event the Philippines would be unable to pay its loan obligations, it can only provide payment in the form of waiving its property rights to so-called “patrimonial assets.”
Patrimonial assets, such as for example, the land where the Manila Library in Taft Avenue is located, remain part of the country’s territory. although the entity that could prospectively acquire it, in this case — China — can use it for commercial purposes or to put up a Chinese government building.
Presidential Spokesman Salvador Panelo, in a press briefing also on Tuesday, said the government had never defaulted from any such agreements similar to that with China for the Chico River Project.
“We had never reneged on such commitments and if you can recall the case of the Bataan Nuclear Power Plant Project (BNPP), we were able to pay for the billions of dollars the government took for that. We honour our debt obligations,” he said.
The BNPP Project which was started during the administration of then President Ferdinand Marcos Sr during the mid-1970s, was not able to generate a single kilowatt of electricity although the project was finished in the early 1980s.