July 17, 2018 / 11:09 AM / 2 months ago

China won't allow Philippines to fall into a 'debt trap': envoy

MANILA (Reuters) - China will not allow the Philippines to fall into a “debt trap”, even as it has committed itself to handing out loans and grants to help finance the Southeast Asian country’s massive infrastructure projects, Beijing’s ambassador said on Tuesday.

FILE PHOTO: Chinese Ambassador to the Philippines Zhao Jianhua talks to reporters after attending a National Heroes Day commemoration at the Libingan ng mga Bayani (Heroes' Cemetery) at Taguig city, Metro Manila in the Philippines August 29, 2016. REUTERS/Erik De Castro

Speaking at the groundbreaking of two bridges in the capital funded by a Chinese grant, Ambassador Zhao Jianhua assured the Philippines his country’s financial aid had no strings attached.

“China’s loans to finance infrastructure projects will not make the Philippines fall into a debt trap”, Zhao added.

Philippine President Rodrigo Duterte, who was present at the event, has promised to usher in the golden age of infrastructure through a six-year, $180 billion spending spree and has sought Chinese investment to modernise and build airports, roads, railways and ports.

Manila and Beijing have a bitter history of disputes over maritime sovereignty, but relations between the two countries have improved markedly under Duterte who has taken a conciliatory approach in exchange for dollars worth of loans, investment and trade deals with China.

“We will do our utmost to prove that President Duterte’s independent foreign policy, particularly friendly and cooperative policy towards China, will produce more tangible benefits to the people of the Philippines,” Zhao said.

Zhao’s comments come weeks after Duterte’s economic planning chief said the Philippines would exercise caution in accepting Chinese loans for infrastructure projects amid claims by analysts that China is leveraging debt in exchange for political influence.

China has committed $7.19 billion for projects in the Philippine infrastructure, energy and public safety sectors, the Department of Finance has said.

Reporting by Karen Lema; Editing by Nick Macfie

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