CEBU, Philippines — The Philippines would have to depend on its traditional loan sources as projects eyed for funding from its emerging ally China would have to take longer to take off, an economist said.
Cebuano economics professor Fernando Fajardo said the challenge of the government now is how to accelerate its massive infrastructure buildup given no big planned China-funded projects have so far taken off since the administration sought China's aid to fund key infrastructure projects.
"That is why the government needs the loans from Japan and other sources and more PPP (public-private partnership) projects like what the previous administration did for most of its projects with little need for more taxes and loans," Fajardo told The FREEMAN.
Chinese President Xi Jinping visited the country last Nov. 20-21 to elevate the relationship between China and the Philippines into a "strategic cooperation".
But while China had pledged to fund key infrastructure projects in the country, Fajardo pointed out none of these has so far been implemented.
"Many are still in the feasibility study stage or asking for funds for the study as shown in some of the 29 agreements during the recent visit of Xi," the economist noted.
During Xi's recent state visit, the two nations signed a cooperation pact on oil and gas development and 28 other agreements on infrastructure, banking and finance, trade and security.
When Duterte first visited China in 2016, the Asian economic powerhouse pledged $24 billion worth of infrastructure financing aid and direct investments into the Philippines.
"So far none of the major infra projects has taken off," he said.
"Like the visit of Duterte in China two years ago, the recent visit of Xi in Manila came up only with MOUs (memorandum of understanding) or exchange of letters of intent. No concrete loan or FDI (foreign direct investment) agreement were reached and signed," Fajardo further explained.
"So I believe that Duterte's China-funded infrastructure projects will not be fully started or realized in his term," he said.
Duterte, who came to power in 2016, has since pivoted away from the country’s longtime defense ally, the US, to China amid Beijing’s rise in the region.
This has eased Manila’s tension with Beijing amid unresolved disputes over the South China Sea but critics have said Duterte has compromised the country’s sovereignty with his policy.