MANILA – The Department of Finance (DOF) has defended the terms of the loan agreement it entered with China, refuting claims that the deal was “highly disadvantageous” for the Philippines.
In a text message, Finance assistant secretary Tony Lambino said that the only deal so far signed with China underwent scrutiny and was processed properly.
His remarks come after anti-corruption group Filipinos Opposed to Corruption and Unjust System (FOCUS) urged the Office of the Ombudsman to launch a probe against Finance Secretary Carlos Dominguez III over the loan.
“FOCUS believes that the loan is highly disadvantageous to the people particularly that it was approved by Secretary Dominguez. In line with this, FOCUS believes that there should be an inquiry on this matter to protect the interest of the country and the Filipino people,” said the group’s spokesperson Jun Braga.
In response, the DOF said it has only entered into one deal with China so far, and the agreement was approved by the proper bodies.
“We have only executed one loan agreement with China, to date,” said Lambino.
Lambino was referring to the Chico River Pump Irrigation facility of the National Irrigation Administration, with China providing a soft loan estimated at $72.49 million.
In his statement, Lambino said the procurement of financing options for the project went through the proper procedure:
- The financing terms of the US Dollar facility for the Chico River Project are concessional at 2 percent for a 20-year period, inclusive of a seven-year grace period.
- The said project has gone through a robust Investment Coordinating Committee approval process.
- The loan agreement was reviewed, negotiated, and approved by the Interagency Committee composed of the Justice Department, the BSP [Bangko Sentral ng Pilipinas], and the DOF.
- On procurement, as agreed, China provided a list of three contractors of good standing and the implementing agency was given the opportunity to vet and request for a replacement, if needed.
- The Monetary Board also approved the terms of the loan for the Chico River Project before negotiation and after signing of the loan agreement.
“All projects and ensuing loans will go through the same process cited above. Terms have not changed,” explained Lambino. (GMA News)