MANILA, Philippines — Japan is beating China in providing financial assistance to the Duterte administration’s ambitious “Build, Build, Build” infrastructure program as Beijing itself had been slow while Manila carefully looks into potential deals, the country’s chief economist said.
“They [the Chinese government] are the ones slow, the processes from their part,” Socioeconomic Planning Secretary Ernesto M. Pernia said Friday when asked why Chinese financing for big-ticket infrastructure projects were not coming in as fast as they should.
Pernia, who heads the state planning agency National Economic and Development Authority (Neda), said it would help if the Chinese side pushes through with their proposal to regularly conduct meetings with Philippine officials to fast-track infrastructure partnership.
Huang Xilian, China’s new ambassador to the Philippines, last December told Finance Secretary Carlos G. Dominguez III that the Chinese government wanted to institutionalize meetings between the two countries “to thresh out issues involving the Duterte administration’s big-ticket infrastructure and development projects that are being implemented with funding support from China,” the Department of Finance (DOF) said.
In contrast, the Philippines-Japan Joint Committee on Infrastructure Development and Economic Cooperation since 2017 already held nine meetings to date, with another one scheduled in Bohol during the first half of 2020.
Another reason mentioned by Pernia that led to slow inflows of official development assistance (ODA) coming from China was the Philippines’ own doing—“we have been very cautious and strict in scrutinizing” potential loan agreements and their implementation contracts.
“We have the screening process on the China level and also on the Philippine side. They have to submit to us three names of companies that are reputable—no record of monkey business before—and really credible. On our side, we also have to screen in terms of selecting the best of the three. So it has been rather slow,” Pernia explained to members of the Nordic Chamber of Commerce of the Philippines.
Pernia was referring to the guidelines issued by Neda’s Investment Coordination Committee (ICC) in 2016, which detailed how contractors of China-assisted projects will be chosen as the economic team wanted to avoid a repeat of the ZTE and the Northrail debacles—anomaly-laden projects entered into with Chinese firms by former President Gloria Arroyo.
“The only China-funded project now actually going on is the Chico River Irrigation project in Cagayan. There’s another one, Kaliwa Dam, but that has just barely started,” Pernia said.
As for the Japanese government, Pernia said its aid arm the Japan International Cooperation Agency (Jica) had been disbursing ODA “much faster” than China did. “We have so many ongoing projects now being funded by Japan.”