Senators dispute Panelo on China loans collateral

Panfilo Lacson

SENATOR Panfilo “Ping” Lacson said he hoped Presidential spokesman Salvador Panelo was just making an “educated guess” when he said that there is nothing wrong in putting up the country’s patrimonial assets as collateral for a Chinese loan.

“Unless Secretary Panelo was just making an ‘educated guess’, something seems wrong with his statement that it is all right to collateralize the nation’s patrimonial assets,” Lacson said in a statement.

But the senator said that Panelo may have a point since the Philippines is vey unlikely to renege on our loans under the budgeting system because debt service is always one of the three regular features of the annual budget law under Automatic Appropriations.

Senator Joel Villanueva has a different opinion.  He said that Malacañang should never use our patrimonial assets as collateral since we have already seen the negative effects of this type of arrangement with China in a number of countries where China eventually ended up controlling the resources and critical assets.

“Even the provision on the use of Chinese labor is unfair to us, unconstitutional to say the least. One of the main purposes of infrastructure spending is the creation of jobs for Filipinos. Other international financial institutions are also offering lower interest rates,” Villanueva said.

He added that with the agreement, the government is putting the future generation in a bind.

“We should ensure that the provisions of these agreements are consistent with the constitution and our existing laws. We have to guarantee that the Filipino people are not worse off with these loans,” Villanueva said.

Senator Ralph Recto, an economist, offered an alternative.  Instead of making assets as collaterals, he said that there are many ways to finance projects which includes PPP or Public-Private Partnerships. 

“If government needs to borrow then it may borrow with the ADB and World Bank. Thereafter it may borrow from JICA (Japan). The last should be China. If at all,” Recto said.

Senator Risa Hontiveros said that the pawning of asset to what she calls “China’s Pawnshop” is treasonous.