Palace: Normal to pledge resources in China loan, default unlikely

MALACAÑANG said on Monday that many features of a loan agreement with China to fund the P3.6-billion Chico River Pump Irrigation Project were “standard” for such deals, including the pledge of Philippine natural resources as security for the loan.
Nevertheless, it expressed confidence that the security will never be foreclosed on because the Philippines is unlikely to default on the loan.
The President’s Spokesperson Salvador S. Panelo made the statement at a news conference Monday after Supreme Court Senior Associate Justice Antonio T. Carpio aired concerns about the loan security.
Mr. Carpio has said, citing the agreement, that if the government defaults on its loan, China can seize Philippine assets in the disputed West Philippine Sea, including the gas and oil-rich Reed Bank.
“The onerous conditions that some are saying incorporated in the contract is a standard between the lender and the borrower,” Mr. Panelo said when asked about the use of natural resources as collateral.
Mr. Panelo said there was “nothing wrong” with using the country’s natural resources as collateral.
“I don’t see anything wrong because I know it will never happen. That is precisely why I am saying that perhaps the economic managers who entered into a contract know that it will never happen,” he said.
“Just like bank institutions when they lend they impose terms to make sure na mababayaran sila (that they will be paid). Eh siguro itong mga pumasok diyan, mga (Maybe when they agreed to the loan) economic managers (thought that default) never namang mangyayari (will never happen), kaya binigay nila, (which is why they agreed to the terms).”
He said that the Philippines is “known for paying its loans.”
“Number one, bakit naman tayo magde-default? (why will we default?) We never defaulted on any obligations to any international organization with respect to loans of our country,” he said.
Mr. Panelo also reiterated that the Philippine government “cannot do anything” about China’s moves in the West Philippine Sea.
“We can only protest like any other (claimant) country, like Vietnam and others… You want us to declare war against them?” he said following reports that Filipino fishermen have been harassed in the West Philippine Sea.
Mr. Panelo added that the government will not go along with China’s treatment of fishermen. “If there is a violation, then we will have to go back to them (and point out violations),” he said.
Mr. Panelo also questioned the filing of a complaint by former Foreign Affairs Secretary Albert F. del Rosario and former Ombudsman Conchita Carpio-Morales against Chinese President Xi Jinping and other officials before the International Criminal Court (ICC) for “crimes against humanity” allegedly committed in the West Philippine Sea.
He said Mr. Del Rosario “did not make noise while he was in office, but is now acting when he is out of power.”
On Ms. Carpio-Morales’ involvement, Mr. Panelo said: “I have no problems with her. She filed it out of righteous indignation.” — Arjay L. Balinbin