Senate panel starts probe on infrastructure foreign financing

MANILA, Philippines — The Senate committee on economic affairs will start today its inquiry into the status of the Duterte administration’s “Build, Build, Build” program, particularly on the economic and security risks of foreign financing used for big-ticket infrastructure projects.

Prompted by resolutions filed by Senators Leila de Lima and Sherwin Gatchalian, who chairs the committee, the probe seeks to inquire into the terms and conditions of the foreign loans, particularly those dangled by China.

The two senators as well as several of their colleagues have pressed for transparency on the Chinese loans as these could plunge the country into a debt trap.

Gatchalian said the inquiry into the status, sustainability and risks of the projects “is necessary for judicious, prudent and sound economic planning and for the proper guidance and information of the Senate in the appropriation of public funds.”

“Concerns have been raised that the borrowing plan of the Duterte administration for its Build, Build, Build program could lead to unsustainable debt levels due to onerous terms of the loans, such as exorbitant interest rates imposed by China at two percent to three percent, or China’s non-traditional loan scheme of holding natural resources as collateral for loans, which can further burden the average Filipino, who will ultimately be responsible to pay for the country’s debt,” his resolution read.

He noted the administration’s flagship infrastructure program includes 75 high-impact projects with a total cost of P8 trillion or an average spending of P1.4 trillion annually from 2017 to 2022. The bulk of the projects or 40 big-ticket items will be funded by official development assistance (ODA).

There is a need to closely monitor the debt obligations and other modes of financing adopted or to be incurred by the administration to ensure transparency, accountability and prudent use of loans, he said.

Among those invited to the hearing today are Secretaries Carlos Dominguez of finance, Benjamin Diokno of budget and Mark Villar of public works.

Also invited are National Economic and Development Authority assistant secretary Jonathan Uy, University of Asia and the Pacific senior economist Victor Abola, Bases Conversion and Development Authority president and CEO Vivencio Dizon, Claire Mapa of the University of the Philippines and officials from the Bangko Sentral ng Pilipinas, Department of Labor and Employment and Department of Transportation.