Author Topic: [RAPPLER ANALYSIS] How the Philippines fell for China’s infamous debt trap  (Read 206 times)

opus

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I would argue that no one who participated in signing this deal was somehow fooled into it.  They were either supremely evil or colossally stupid, and I do not believe they are stupid.  Getting us into the trap was the plan from the start.


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[ANALYSIS] How the Philippines fell for China’s infamous debt trap

JC Punongbayan
Published 2:13 PM, March 27, 2019

China’s debt trap was completely avoidable. Yet we still fell for it.

No less than Senior Associate Justice Antonio Carpio of the Supreme Court has combed through the Chinese loan agreements entered into by the Duterte administration and found onerous provisions that imperil our nation’s “patrimonial assets.”

That China is capable of imposing such conditions should come as no surprise.

China, in its bid for global economic and political dominance, has wantonly trampled on the rights and sovereignty of many a developing country.

But how exactly does China’s debt trap work? How deep are Filipinos into this mess? And who must be held accountable?

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Onerous provisions

It was only recently – after much public pressure – that the Department of Finance (DOF) published on its website the full text of the loan agreements recently entered into by the Philippine government.

Justice Carpio zeroed in on the loan agreement for the Chico River Pump Irrigation project and pointed to 3 onerous provisions:

First, the Philippines apparently agreed to waive its sovereign rights on “patrimonial assets” or properties owned by the state not “intended for some public service or for the development of the national wealth.”

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Second, in the event of a dispute about this loan, the Philippines also agreed to subject itself to an arbitration to be held in Beijing, overseen by a tribunal that will always be composed by a majority of Chinese nationals – thus putting us at a disadvantage by default.

Third, the loan agreement also stipulates that its details are to be held in “strict confidentiality,” in direct contravention of the 1987 Constitution.

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https://www.rappler.com/thought-leaders/226745-analysis-how-philippines-fell-china-debt-trap
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MCentaur

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Thank you Opus for adding me.

One only needs to look at the examples of Sri Lanka and a number of African nations to see what China's debt trap has done.

But in staying focused on the Philippine context, the issue of the debt trap, not to mention Chinese investments into the Philippines is also covered in the thread, "PH's Trade Imbalance with China" at the PDFF forum, if you're interested.
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MCentaur

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"Chinese ODA not beneficial for Philippines"
« Reply #2 on: April 02, 2019, 05:47:37 PM »
While not mentioned below, one notable outlet of China's foreign aid, or "Official Development Assistance" is China's Asian Infrastructure Development Bank (AIDB), its own version of the Asian Development Bank. The AIDB is yet another tool to further its influence and economic control through debt traps.

Philippine Star

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ODA from China may not be beneficial
    Paolo Romero (The Philippine Star) - June 25, 2018 - 12:00am

    MANILA, Philippines - Grabbing official development assistance (ODA) being dangled by China to finance the Duterte administration's infrastructure programs may not be good for the country, Senate President Pro Tempore Ralph Recto warned yesterday.

    Recto was referring to the administration's P8-trillion "Build, Build, Build" program that he said was vital in putting the economy on solid footing but could spiral downward if financed with expensive foreign loans.

    "I heard we're borrowing at a very high cost from China, and these are not concessional loans but commercial rates," Recto said. "How are we going to reach that P8-trillion mark? When you're going ODA, there's no bidding so you’re not going to get the best price."

    Recto noted that ODA in general is expensive but the government, in many instances, has no recourse but to accept the accompanying terms. The government or entity that grants the ODA often dictates the suppliers or contractors that undertake the projects.

    (...SNIPPED)
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MCentaur

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Debt trap? Fil-Chinese businessmen downplay concerns of Chinese loans
« Reply #3 on: April 08, 2019, 08:22:08 PM »
ABS-CBN

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Debt trap? Filipino-Chinese business group downplays concerns on China loans
    A Filipino-Chinese business group calls on the public to give China a chance to show its deals with the Philippines will ultimately benefit the country. This, amid fears Manila could fall into Beijing's so-called "debt trap," as well as concerns over the influx of Chinese workers here in the Philippines. - Business Nightly, ANC, April 8, 2019

"If you think you can do a thing or think you can't do a thing, you're right." - Henry Ford

"If everyone is thinking alike, someone isn't thinking"- Gen. George S. Patton

Philippines Defense Forces forum