Slow China loans a blessing in disguise?

MANILA, Philippines – President Rodrigo Duterte and Chinese President Xi Jinping signed a total of 29 deals during Xi's state visit to Manila.

But a closer look at the list shows that most are still in various stages of talks and are not yet for actual implementation. (LIST: Deals signed during Xi Jinping's trip to Philippines)

China pledged some $24 billion worth of loans for projects, but most have yet to materialize.

Looking at data from the National Economic and Development Authority (NEDA), traditional partners like Japan have provided the most official development assistance (ODA) grants. (IN CHARTS: Don't credit China for Philippine growth just yet)

With the slow pace of securing Chinese loans, critics have questioned whether Duterte's sweet talk is really paying off.

Finance Secretary Carlos Dominguez III defended the Duterte administration, saying that they did not "inherit" a long pipeline of projects and that they started almost from scratch in securing funds for the infrastructure push.

"We are very happy things are moving ahead," Dominguez said on the sidelines of the meeting between Philippine and Japanese officials for infrastructure projects.

"When we talk about a state visit, [the] primary purpose is not to sign projects or agreements, it is to discuss issues that relate to both countries," he added.

While loans from China have not been moving as fast as many expected, it does not mean that the Philippines is not at risk of falling into the debt trap like other developing nations. (READ: Chinese debt trap? Americans did it too – Dominguez)

Both Budget Secretary Benjamin Diokno and Socioeconomic Planning Secretary Ernesto Pernia have said the government is "extra careful" in dealing with the Chinese.

Moreover, Philippine Ambassador to China Chito Sta Romana suggested that the slow pace is an indicator that the country is far from falling into the debt trap.

"[The slow pace is] an advantage. Then you avoid the debt trap. We are not in danger," Sta Romana said before Xi's visit to Manila.

While the debt trap's horns are not showing yet, opposition lawmakers are still taking a proactive stance. (READ: [OPINION] Lessons for Manila from Sri Lanka's 'debt-trap' experience)

Senator Ralph Recto said the economic managers will be "subjected to grilling" during debates on the 2019 national budget in December, when the deals will also be brought up. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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