The current issue seen about the rising involvement of China in the development of the Philippine economy is just raised into question. Though we need partners in the development of our economy, the potentials offered by China in the channel of loans to the government should be taken into deeper study prior any sharp actions are taken.
We cannot blame other people's thinking of assailing the perfection of acquiring loans from China, but the same, they should undergo detailed studies and considerations regarding its viability and rate of return. This was due to the turn outs of other investments of China in other countries which had become unproductive and finds incapable of repaying those loans.
The Sir Lankan Case is one. Knowing that the massive inflows of Chinese investments into Sri Lanka that turned out to be no longer viable for that country to repay its loans, is a sign of slowing down and taking more cautious on our approaches with foreign loan applications and agreements.
The future scenario could be devastating once loans becomes mature and the country cannot take the capability to pay them. The west Philippine sea is one matter that would be at risk. Though we won in the Hague ruling, the future might overturn against our favor if because of loans these areas will be equated to debt to equity agreements. That's one risk.
The problem with china is its demand of converting loan obligation to debt to equity. A mode which they have demanded from other countries, that the same, may possibly arrive at us in the future.
No comments:
Post a Comment