Why RP officials prefer China loans

[shadow]

hhhmmm....pieces falling into their places???

Why RP officials prefer China loans
GOTCHA By Jarius Bondoc
Wednesday, March 5, 2008
ANC’s Ricky Carandang wrote in his blog an article similar to mine Monday on treason and plunder. Although also noting that Chinese loans suddenly poured in after RP allowed joint exploration of the Spratlys, his was a week ahead. Ricky based his piece on a report he did for ABS-CBN’s The Correspondents on Feb. 19. Given the time it takes to research, he likely was also ahead of Barry Wain’s report in the Far Eastern Economic Review on “Manila’s bungle in the South China Sea.” The son of a gun scooped us.

In “Treason” Ricky outlined RP’s overlapping claim over the Spratlys with China, Taiwan, Vietnam, Malaysia, Indonesia, and Brunei. The seven claimants reckon the island chain, which Filipinos call Kalayaan, holds huge reserves of oil and natural gas. Past Philippine Presidents had always stood defiant against Chinese incursions in Philippine waters and occupied Kalayaan. But under Gloria Macapagal Arroyo, RP signed with China a pact for joint seismic studies and oil-and-gas exploration. In so doing, RP enraged its neighbors. In appeasement, Vietnam had to be let in on the deal.

With Ricky’s permission, excerpts from his piece:

“Aside from angering our neighbors and potentially undermining regional stability, Arroyo’s action may also be illegal. Ombudsman Merceditas Gutierrez — then-acting justice secretary — told former Senator Frank Drilon, then allied with the administration, that she believed the deal violated the Constitution. While it was between the state-owned oil firms (PNOC of the Philippines and CNOOC of China), it implicitly gave China access to our oil reserves. Foreign affairs officers were also upset because the deal effectively strengthened China and Vietnam’s claim to the Spratlys.

“Why would Arroyo sign a deal that potentially undermines regional stability, possibly grants China parity rights to oil reserves in the Spratlys that we claim as ours, and likely violates our Constitution? After the Spratly deal was signed, the Chinese government committed $2 billion in official development assistance a year to the Philippines until 2010, when Arroyo is supposed to step down from office. My sources tell me that the Spratly deal was an explicit precondition to the loans.

“For the Arroyo administration the China loans are particularly appealing. Not so much because the interest rates are so low and the repayment terms so lenient, but because Chinese loans do not have the cumbersome requirements that loans from the US, Japan, the EU, and big multilateral lenders have. Requirements for documentation, bidding, transparency and other details that make it very difficult for corrupt public officials to commit graft. In November last year, such requirements made it impossible for some government officials and private individuals with sticky fingers to avail themselves of the World Bank’s generosity.

“Given China’s laxity with certain conditions, it’s no wonder why almost every big-ticket government project funded by Chinese ODA has been the subject of allegations of graft and corruption. There’s Northrail, Cyber Education, the Fuhua agricultural projects, Southrail, and of course the ZTE National Broadband project.”

click me!

[uls]

China is very willing to lend us money coz China has earned so much dollars from exports... their banks have so much dollars they are bursting.

They have to find ways to make their savings grow.

One of their ideas is to lend out the money.

China is an alternative to western financial institutions.

[tidus1203]

I just hope that unlike the US China won't start picking up our assets. But to be honest ok lang sakin maging probinsya tayo ng China para naman makinabang natin yung growth nila....

[Syuryuken]

pwedeng magpautang ang China sa RP kahit walang mga bidding unlike sa ibang bansa na magpapautang lang kung may bidding sa paglalaanan.

inshort mas madaling makanakaw ang mga opisyales kung sa China manggagaling ang pondo

[uls]

OT lang po...

but that's the way the Chinese do business... mabilis, walang pasikot sikot.

U wana borrow money? here's the money.

unlike westerners ang dami kaartehan... dami formalities... dami ritual... they even have to bring in lawyers just for a simple business transaction... coz people dont trust each other...

There are still chinese businessmen here who still do business the old-fashioned way... verbal lang... walang kontrata...

[blacksun25]

it is ok na mabilis at walang pasikot-sikot ang pag-transact ng mga chinese business people pero we are talking about public funds here. sino ba ang magbabayad ng utang na yan?? e di ang kawawang si juan de la cruz. I don't care kung matagalan ang isang transaction ng gobyerno naten as long as transparent ito at walang pangungurakot na mangyayari. just my opinion lang po.

[uls]

i understand that.

The Chinese lenders are doing what comes natural in a capitalist system.

They are competing with western financial institutions for borrowers (like the Phils.)

They attract borrowers by offering the borrowers better terms and conditions than what the western financial institutions offer.

If the Chinese terms and conditions encourage corruption on the part of the borrower, well, it is no longer their problem... what is important is they successfully attract the borrower and make the loan.

That's free-market capitalism.

Evil. hehe