On Monday, Ray Washburne, US Overseas Private Investment Corporation (OPIC) criticized China for using loans to poor nations encouraging each country to depend on them through unsustainable debt by means of large-scale infrastructure projects which are not economically viable.
Amid observations that Manila seems inclined to borrow more from Beijing, Chinese Ambassador to the Philippines, Zhao Jianhua denied the concerns that the Philippines is headed to a debt trap to fund its ambitious infrastructure program.
"Actually there has never been a debt trap. It’s all based on mutual agreement," Zhao told reporters.
"There is no mention or no avenue for ownership, your government will own all those projects. So there will be no question of putting yourself in debt. I think your economic team is smart enough," he added.
The Ambassador attended the groundbreaking ceremony held in Intramuros, Manila for the construction of two bridges which are financed by the Chinese government. Zhao then clarified that the projects will be financed by the Chinese grants for free.
"You’re going to use some Chinese soft loans to finance some infrastructure projects. That is simply the decision by your government to use the soft loans and the infrastructure project will be undertaken by a Chinese company through limited bidding process," said Zhao.
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