Digong, The President

[Wh1stl3r]

PH refuses new EU grants; P13 billion at stake



13B pesos lang naman pala, kaya naming utangin yan sa China.

Galing kaya ng strategy ni tatay dutiti. 😁

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Baka walang commission sa EU grants? Sa China sigurado meron. 10-15% ba naman ang interest rate.

[ClaNker]

Baka walang commission sa EU grants? Sa China sigurado meron. 10-15% ba naman ang interest rate.

Monitored yang grants, mahirap kumupit. Unlike sa loan na iyong-iyo na.

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[Wh1stl3r]

Monitored yang grants, mahirap kumupit. Unlike sa loan na iyong-iyo na.

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Ano pa nga naman ba ang magandang rason para ayawan yung libre at palitan ng utang na mataas ang interest rate. 😁

[badkuk]

^ yan ba yung total interest or annual?

[Wh1stl3r]

^
Should be annual.

This article shows a projection of what might be in store. Rate is at a conservative (unlikely) 10%.

https://www.forbes.com/sites/andersc...ForeignAffairs

Goodbye low debt to gdp ratio. Dutertenomics!
👊

[Wh1stl3r]

From the same article:

Duterte and his influential friends and business associates could each benefit with hundreds of millions of dollars in finders fees, of 2-7%, for such deals.

Duterte reportedly sought to fast track some deals, and has publicly mooted the possibility of declaring martial law for a wide range of issues, including drugs, traffic, and the situation on Mindanao. Debt imposed on the public through corruption, fast-tracking or under martial law should be considered odious debt, and not repayable.

The only way to stop such unjust debt is for the terms to be entirely transparent to the Philippine public in advance, for full cost-benefit analyses to be done by an independent authority on each deal, and for the Philippine Congress to vote on whether each deal proceeds. Failing that will lead to virtual Philippine debt bondage to China.

The interest rate that China will offer the Philippines on such a large sum relative to GDP is likely higher than the World Bank rate, but likely lower than say 15%.

Without much needed transparency from the Duterte government and China on the rate, conditionality, and repayment terms of $167 billion of new debt for the Philippines, the public should assume, to forestall a worst-case scenario, that the rate would be somewhere between 10% and 15%. Over 10 years, that could ballon Philippines’ debt:GDP ratio as high as 296%, the highest in the world.

At any likely interest rate, the Philippines will have trouble repaying $167 billion in debt, plus interest, to China. The Philippines will have to give political and economic concessions to China in order to repay annual interest, or renegotiate such a large quantity of debt.

That could include political concessions, for example giving up territory or oil rights in the South China Sea or Benham Rise, or it could include economic concessions, for example selling China its national companies, or agreeing to below-market rates on exports to China.

Mongolia once agreed to sell coal to China at 11% of the global benchmark price in order to secure a loan to repay other loans. It could happen to the Philippines if it falls behind in interest payments on $167 billion.

kagalingan (not OB) pasok!

[uls]

we really don't know yet ano interest rate ng mga loans

lots of speculation

may nagsasabi the loans will be concessionary loans meaning lower interest rate than commercial loans

may nagsasabi the loans will have commercial rates

for reference we can do some research on countries China has already loaned money to

[Monseratto]

[rambo149]

Duterte did not consult economic team on rejecting EU aid – Pernia | Money | GMA News Online

hahhahaha another circus event

[vinj]

i'm guessing they're mum on the missle battery they recently installed as well

They're mum on pretty much anything that is of real concern. Quite sad.

[vinj]

Duterte did not consult economic team on rejecting EU aid – Pernia | Money | GMA News Online

hahhahaha another circus event

I would want to believe so as well as the move is more political and self serving "pasabog" more than economic.

[Wh1stl3r]

we really don't know yet ano interest rate ng mga loans

lots of speculation

may nagsasabi the loans will be concessionary loans meaning lower interest rate than commercial loans

may nagsasabi the loans will have commercial rates

for reference we can do some research on countries China has already loaned money to

Yup. The point is, each and every loan must be scrutinized in congress. Something unlikely to happen here, given most congresspeople are glorified turnstiles and he enjoys supermajority support.

Also from the article:

Even at 5%, which is nearest the lending rate of interest published by the IMF and World Bank for the Philippines, the effect of such a large sum would be an increase in debt (in addition to existing debt) of $275 billion after 10 years. That would bring the Philippines’ debt:GDP ratio to approximately 136%.

[H1Tman]

WTH cares about Debt to GDP ratio?

Basta badtrip siya sa EU, MGA IDIOT!

WELCOME TO HELL!

[uls]

a big question hanging over my head is in what currency China will be lending

if they lend in USD, where will the USD come from?

of course from their forex reserves

but why the hell would they risk their precious reserves on high risk loans?

they need the reserves to defend their currency

they already burned thru 1 trillion dollars defending the rmb



and they need to pay dollar-denominated debt and imports

so putting several hundred billion dollars into silk road projects doesn't make sense

silk road countries aren't rich

it's unlikely the loans will be paid back

to be continued...

[uls]

continuation:

China can lend in their own currency

since the main lenders will be Chinese banks like Exim and China Dev't Bank, they can create unlimited amounts of RMB

and contractors and suppliers will also be Chinese companies so no problem with currency acceptance

lending in RMB can accelerate the internationalization of the RMB (which is one of China's goals)

BUT

with hundreds of billions, or trillions of RMB going overseas, naturally the currency will be traded internationally

will China allow the free market to determine value of its currency?

The control freaks in China won't even let USDCNH (RMB traded in HK) go beyond their tolerance level

AND

in order to pay back RMB loans, silk road countries will have to have RMB reserves in the first place

nobody has rmb reserves

you get rmb reserves by selling stuff to China and accepting rmb as payment

silk road countries will be getting rmb loans first

then they have to figure out how to pay China

sell China their companies?

sell China their minerals?

sell China their islands?

i'm not a conspiracy theorist

but it seems China's plan is to bury other countries in debt

so China can take their assets

[badkuk]

yep, pretty much my theory as well....they will take anything and everything as payment. The disputed islands as are good as gone, especially those with oil & gas reserves

[Wh1stl3r]

That is the face of modern day imperialism. Hold other economies hostage. Best way to impose your interests on other countries without triggering sanctions.

The scuttled TPP looked like the US's way of containing that. Now there is practically nothing in China's way.

Found this article re: Chinese investment in Africa

Chinese Aid and Investment: Aiding Africa or Themselves?

[badkuk]

Sec. Dominguez saying that aid from the US and EU was insignifcant...i guess there were sime alien beings who sailed thei aircraft carrier to Leyte after Yolanda struck. And how much aid did China send to us btw? Care to make a comparison with that of the US/EU?

[H1Tman]

So by the time this President is over, China will have all the disputed islands.

Where are those anti-imperialist now?

Is Duterte dumb enough not to know this intent of his friend China? Or is he playing dumb.

[badkuk]

to be fair, it's not as if the US/EU doesn't have its own interests...that's just the way the world works. That said, it wouldn't hurt to shop around and see whose terms are most attractive, or the least disadvantageous to us. i don't think we are doing that right now.