Chinese-funded infrastructure projects could lead to debt crisis, expert warns

MANILA, Philippines — The Philippines could be burying itself in substantial debt from infrastructure projects funded by Chinese official development assistance (ODA), an expert in geopolitics and geoeconomics has warned.

Speaking at Stratbase ADR Institute’s forum on Friday, President Dindo Manhit stressed the importance of implementing safeguard mechanisms to protect against corrosive capital, which encompasses private financing with underlying political motives.

Such financial arrangements, lacking transparency and accountability, have "the potential to incite debt dependencies," Manhit said during the think tank's forum "Revitalizing the Philippines’ Infrastructure Development through Public-Private Partnerships."

"Without proper oversight, investments in infrastructure flagship projects, particularly those funded by Chinese ODA or through the Belt and Road Initiative (BRI), could be exploited to circumvent Philippine laws. These could then undermine the country’s democratic institutions and make it vulnerable to political and economic manipulation,” Manhit said.

Manhit's warning comes in the wake of recent developments related to projects funded through Chinese ODA.

In early September, the Department of Transportation announced the possibility of terminating loan contracts for three major railway projects financed through Chinese ODA by the end of this year. These projects include the Subic-Clark Railway Project, the Philippine National Railways South Long-Haul Project (PNR Bicol Express), and the Davao-Digos segment of the Mindanao Railway Project.

ODA vs PPP

The think tank on Friday released the results of a study comparing two significant infrastructure projects funded in different ways: one through an ODA loan