China won’t make empty promises about financial assistance to Philippines

By Hu Weijia Source:Global Times Published: 2018/8/5 22:13:40

China won't coax the Philippines by offering empty promises. What is needed is an effective means of communication to strengthen bilateral cooperation in the area of infrastructure.

Some media outlets have criticized China for not fulfilling its $24 billion worth of investment commitments and loans, which were promised to the Philippines in 2016 when Philippine President Rodrigo Duterte visited China.

The trip was seen by many observers as a turning point for Manila's relationship with Beijing after bilateral ties were damaged by the South China Sea arbitration ruling.

Beijing aims to enhance long-term cooperation with Manila and the $24 billion in commitments is an important part of that. Given the complexity of the Philippine economy and cross-border investment, the commitments should be implemented step-by-step with patience.

In the first half of 2018, the Philippine government's total spending on infrastructure was only 352.7 billion pesos ($6.6 billion), according to local media reports.

There is limited market capacity in the Philippines for infrastructure investment, so it might take several years for the Southeast Asian country to digest the $24 billion investment and credit line, which is more than twice the total foreign investment attracted annually by the Philippines.

Although China is willing to strengthen infrastructure cooperation with the Philippines under the government's "Build, Build, Build" program, it doesn't mean China will randomly pour money into the Southeast Asian country to please Manila for political purposes. China must ensure that the people of the Philippines really benefit from China's economic aid and investment, and it must carry out feasibility studies to avoid projects that won't make money.

Such evaluations may slow the pace of investment, but China has no intention to deliberately withhold funding and simply offer an empty promise.

Even though some Chinese-funded projects were delayed for economic reasons, China is now an important source of investment to the Philippines.

China will continue to support the Philippines to improve its infrastructure, but the two sides should strengthen communication and coordination to expedite the implementation of investment projects.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON ECONOMY

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