Budget Secretary Benjamin E. Diokno. INQUIRER file photo
The Duterte administration’s “independent” foreign policy is auguring well for its ambitious “Build, Build, Build” program as China and Japan are pitching to finance big-ticket infrastructure and infuse $9 billion each in funding to the Philippines, Budget Secretary Benjamin Diokno said Monday.
Diokno reiterated in a media forum that the Philippines was very careful in securing financing from China as a top US official last week warned of “opaque” loan terms from the mainland.
“In our case, we’re very careful. We have very rigorous processes. Neda (the state planning agency National Economic and Development Authority) evaluates” projects as well as the appropriate financing schemes for each, Diokno said.
The budget chief added that the Philippine government chooses the projects it wanted to roll out—“it’s not dictated by other governments, so it’s not supply-driven; it’s demand-driven.”
Following Finance Secretary Carlos Dominguez III’s statement last Sunday that the government would review Chinese financing offers after US Vice President Mike Pence’s warning issued during the Asia-Pacific Economic Cooperation meeting in Papua New Guinea, Diokno said the Philippines would “shop around for the best terms.”
“That’s the rationale for the review,” Diokno said as he noted that Japan, for instance, offered lower interest rates for its loans.
In fact, Philippine and Japanese economic officials will hold their sixth high-level joint committee meeting on infrastructure development and economic cooperation on Wednesday “to discuss the processing of new concessional loan agreements that would provide the Duterte administration’s ‘Build, Build, Build’ program with additional financing support from Japan,” the Department of Finance said in a separate statement also on Monday.
Dominguez, who heads the Duterte administration’s economic team, will chair the Philippine side. Hiroto Izumi, who is special adviser to Japan Prime Minister Shinzo Abe, will lead the Japanese delegation.
Diokno noted that the meeting with the Japanese would happen a day after China President Xi Jinping’s visit to the Philippines.
The Budget chief said such was “consistent with the President’s independent foreign policy.”
“We’re friends to all, so we’re getting support from abroad,” he said.
Despite increasing borrowings from overseas, Diokno said the country was not falling into a “debt trap” as economic growth still outpaced the growth in loans being secured by the government.
He said the debt-to-gross domestic product (GDP) ratio stood at about 40 percent at present and was declining.
The share of debt to GDP was projected by the government to fall further to just over 38 percent by 2022 as “we will outgrow our debt accumulation,” Diokno said.