Beijing denies demanding natural resources as collateral for loans to PH

March 11, 2018 - 10:22 AM
Duterte Xi Belt and Road
President Rodrigo Duterte and China's President Xi Jinping in file image at the Belt and Road Forum. Beijing's foreign ministry has denied reports China was demanding nagtural resources as collateral for official loans to Manila. NEWS5 SCREENSHOT

MANILA – Beijing has denied a claim by a Chinese think tank that it was seeking Philippine natural resources as collateral for loan agreements, a claim that had sparked strong warnings from some lawmakers.

“China has never asked and will never ask relevant countries to use natural resources as collateral in loan agreements. In this vein, our assistance and support to the Philippines are provided with no strings attached,” Chinese Foreign Ministry Spokesperson Geng Shuang said at a press conference on Friday. He was responding to a question regarding an article from the Chinese newspaper Global Times, which cited a Chinese scholar’s view on China’s official preferential loans to the Philippines.

He also responded to questions arising from Philippine media reports that China provides loans with terms that require Manila to compromise on the South China Sea issue.

“To properly resolve the South China Sea issue is the basis and important guarantee for the sound and steady development of China-Philippines relations, but China will not link the South China Sea issue with bilateral economic and trade cooperation projects,” Geng said.

He stressed that “China stands ready to work with the Philippines to follow through on the consensus between the two leaderships and stay committed to properly resolving differences through dialogue and consultation, ensuring the sound and steady development of bilateral relations and jointly upholding regional peace and stability.”

According to Geng, since China-Philippines relations saw a big turnaround in 2016 – when Rodrigo Duterte became president – China “has been actively helping the Philippines develop its economy and improve people’s livelihood,” and has given full support to Duterte’s large-scale infrastructure program “Build, Build, Build”.

Geng further said, “the Chinese government and financial institutions have also provided financing support to the Philippines, including preferential buyer’s credits, and assisted the Philippines in issuing the panda bonds, which effectively ensured the implementation of relevant projects.”

By convention, “parts of China’s concessional loans require the borrowers to use certain sovereign credit as collateral, which is an international practice.” But, he added, “China has never asked and will never ask relevant countries to use natural resources as collateral in loan agreements.”