Government urged to scrutinize China deals

MANILA, Philippines - The Duterte administration’s pivot to China may come at a political price, according to a Denmark-based investment advisory firm.

In a recent interview with The STAR, Peter Lundgreen, CEO of Lundgreen Capital, said the government needs to carefully scrutinize Chinese funding for big-ticket infrastructure projects in the Philippines because this would not come free.

He said this would be viable as long as the government ensures that the projects are important to the public.

“The key is to select viable infrastructure projects. The key is not so much whether it is publicly or privately Financed,” he said.

What is important is the quality of the projects. It’s okay to have public financing vehicle just as long as it’s not a political instrument. If it’s making financing cheaper, that is a good idea. It depends on the public finance vehicle. If it’s a political instrument rather than an economic instrument then it’s bad,” Lundgreen said.

He believes the Chinese government wants to extend its political influence in the ASEAN region.

“There is no doubt that the Chinese government is trying to purchase political brownie points. They want to purchase political influence in the ASEAN region. They are buying friendship. Is that good or bad? People in China think differently from people in the United States,” Lundgreen said.

Lundgreen said it may be very difficult for the Philippines to have the same discussion about what’s going on in the West Philippine Sea in the future.

“These things should be considered,” he said.

“It can have a serious impact on the territorial dispute. We should never forget that economic power today is political power tomorrow. This is the game that Chinese play. Now they are securing stuff in the Philippines,” he added.

Lundgreen said if there are too many complaints about the West Philippine Sea, the Chinese may stop its financing.

“China in that sense will become very big. There may be political dependency on the part of the Philippines because it’s public money coming from China,” he said.

But the Chinese government said Duterte’s pivot to China bodes well for both countries.