Chinese-funded infrastructure projects could lead to debt crisis, expert warns

Speaking at Stratbase ADR Institute’s forum on Friday, President Dindo Manhit stressed the importance of implementing safeguard mechanisms to protect against corrosive capital, which encompasses private financing with underlying political motives.

In early September, the Department of Transportation announced the possibility of terminating loan contracts for three major railway projects financed through Chinese ODA by the end of this year. These projects include the Subic-Clark Railway Project, the Philippine National Railways South Long-Haul Project , and the Davao-Digos segment of the Mindanao Railway Project.

"The Philippines has experienced this vulnerability during times of global economic uncertainty, highlighting the risks associated with dependence on foreign capital,” Manhit added. Highlighting the fiscal constraints faced by the government in financing major infrastructure projects, Manhit emphasized that public-private partnerships offer a viable solution for expediting the completion of projects that aim to bring essential services to people.

Ejercito, sponsor of Senate Bill 1974, emphasized that the reforms to be introduced by the PPP Act would clear the backlogs in the country's public works and infrastructure development program while giving the government the flexibility to choose the best, most cost-efficient projects. “The regulation governing tollways and interoperability, the rules are outdated and need to be up to date. Sometimes the is even more advanced than the law itself,” he said.

Source: Loan Digest (loandigest.net)

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