Weigh PH’s loan options
Our leaders, particularly Finance Secretary Sonny Dominguez, have an obligation to inform us why we will be committing future generations to oppressive loans from China to finance our infrastructure projects.
Compared with loans from Japan, those from China reportedly cost 1,000 to 2,000 percent higher and have onerous conditions, such as the requirement to use Chinese contractors and workers.
The reason given by National Economic and Development Authority Director General Ernesto Pernia is that Japan takes longer to process loans than China. That is a convenient explanation, but coming from the Neda chief, one would expect some quantified justification.
What other lower-costing financing options are available to us? How about IMF, ADB, World Bank, the European Union? How about government bonds? For transparency’s sake, should we not be provided with a matrix of these options? How do all the projects stack up against our absorptive capacity?
The “Build, build, build” program is good for its optics, but it fails to consider the limited capacity of our bureaucracy and institutions. Our engineers, technicians and professionals cannot handle these massive projects all at the same time.
Right-of-way issues have always delayed projects. Stumbling blocks presented by vested interests in Congress have likewise stymied projects such as the Northrail project, the Naia expansion and many others. We need to do a better job in prioritizing projects.
Why not stagger the loans to avail ourselves of options from Japan as funds become available? Staggered loans may also allow us to tap other sources instead of committing to gargantuan loans bearing oppressive interest rates. And we also know how Chinese goods and technology, while improving, are still way below the standard of their Japanese counterparts.
JUN GIL, [email protected]
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.