Philippines finance chief reportedly hits back against people who worry about China loans

  • Filipino Finance Secretary Carlos G. Dominguez III said the country has never defaulted on its loans, amid worries over the Southeast Asian nation's ability to repay its debt to China, local press reported.
  • There are concerns that the country cannot generate enough cash to pay the interest on its loans to China and falling into a "debt-trap."
Chinese Premier Li Keqiang (R) and Philippines President Rodrigo Duterte (L) attend a meeting at the Great Hall of the People in Beijing, China, October 20, 2016.
Wu Hong | Reuters
Chinese Premier Li Keqiang (R) and Philippines President Rodrigo Duterte (L) attend a meeting at the Great Hall of the People in Beijing, China, October 20, 2016.

The Philippines' finance secretary said his country has never failed to repay its loan payments, local press reported. His comments come amid concerns over the Southeast Asian nation's ability to repay its mounting debt to China and other countries.

"The Philippines has never, never defaulted on its loans. The Philippines has not done it even in the worst time, and the worst time was right after Marcos," Carlos G. Dominguez III said in a statement on Tuesday, the Philippine Daily Inquirer reported. He was referring to the two-decade long reign of the late Filipino dictator Ferdinand Marcos.

"Even when the Philippines was cash-strapped, it had never defaulted on any of its loans," said Dominguez.

The Philippines has borrowed money from China and other nations to fund its massive infrastructure projects, under President Rodrigo Duterte's signature "Build, Build, Build" program.

"I don't know why people are saying, 'there might be a default.' That means to say those people have no faith in their own country," Dominguez said.

Like in many developing countries, there are concerns that the Southeast Asian nation cannot generate enough cash to repay the interest on China's loans.

Observers worry that Beijing may seek economic or political concessions as compensation as was the case with Sri Lanka, which had to hand over a strategic port to Beijing in 2017 when it couldn't pay off its debt to Chinese companies.

The phenomenon has been dubbed debt-trap diplomacy, which Chinese President Xi Jinping's administration has denied engaging in.

Read Carlos G. Dominguez III's comments about The Philippines' loans from China.