Official bids to ease fear over China financing for infra projects in RP
SOCIOECONOMIC Planning Secretary Ernesto Pernia sought to allay fears that the Duterte administration’s bid to secure financing from China for its ambitious infrastructure programme could lead to the entry of Chinese firms with questionable records.
“We certainly are going to be very careful in our dealings in terms of project financing from the Chinese government,” said Pernia, also head of the National Economic and Development Authority.
Concerns over questionable sources of funds from China could be premature since “we haven’t yet signed any loan agreement with China except oral commitments or some written memoranda of understanding”.
The administration, heeding the “Build, Build, Build” mantra, has identified dozens of infrastructure projects for implementation and possible completion during President Rodrigo Duterte’s term, which ends in 2022.
The projects are worth an estimated total of 8.2 trillion pesos (Bt5.4 trillion).
Former president Benigno Aquino III had cautioned against acquiring high-interest loans from China.
Pernia said companies taking part in the infrastructure programme would have to be vetted by the Chinese government, which would help eliminate the risks of a company with questionable records getting contracts from the Philippine government.
Massive investments in the medium-term infrastructure programme would come from an “optimal mix” of sources – the government, official development assistance and the private sector.
“The idea is to always find the most cost-effective and optimal mix of funding sources,” he said.
There was no need to worry about Chinese companies with questionable records being able to secure contracts because there would be two “clearing mechanisms” for Chinese firms taking part in the programme.
The first would be vetting by China.
Certification sought from China
“We want the Chinese side to certify to us that the companies that will be involved in the projects will be truly competent and with impeccable integrity,” he said. This applies to private and state-owned Chinese firms, he said.
The Chinese government would submit the names of three companies that had passed the vetting process and the Philippine government “also has a clearing mechanism to pick” the firms recommended by China.