Philippines is set to increase government spending on infrastructure as percentage of Gross Domestic Product (GDP) via an P8.4 trillion infrastructure spending program. Based on the data compiled by the Department of Budget and Management (DBM) from 2010 to 2016, government spending on infrastructure as percentage of GDP averaged at 2.9%. DBM stated that the infrastructure spending program will increase government spending on infrastructure as percentage of GDP from 5.3% in 2017 to 7.4% in 2022. Out of the proposed 75 infrastructure projects, the National Economic and Development Authority stated that 35 had been approved while the rest are undergoing evaluation by the concerned government agencies. In order to finance the infrastructure spending program, the Philippines will need funding from international financial institutions, multilateral development banks and traditional creditor countries. But it had chosen the road less traveled by accepting the pledge by China to fund 18 infrastructure projects worth an estimated P731.7 billion. We must be aware that Chinese loans can be generous in the short-term but can be dangerous in the long-term. Chinese loans have interest rates between 2% to 3% while Japanese loans have interest rates between 0.25% to 0.75%. Moreover, Chinese-owned companies and Chinese workers rather than Filipino-owned companies and Filipino workers will be required to work on China-funded infrastructure projects. Known as the Belt and Road Initiative (BRI), China has been funding infrastructure projects in underdeveloped countries in exchange for diplomatic relations, natural resources and regional access. Based on a study conducted by the Center for Global Development, countries participating in the BRI that will default will find themselves in a Debt Trap. The study evaluated the present and future debt levels of the 68 countries hosting China-funded infrastructure projects and found that 23 countries are at risk of default. As the BRI expands in scope so do suspicion that it is a form of economic imperialism that gives China an undue leverage over underdeveloped countries. We must be concerned that its expanded commercial presence can lead to an expanded military presence as most of these China-funded infrastructure projects can be used for commercial and military purposes. China can use its leverage over the Philippines to expand its artificial islands in the West Philippine Sea and to support its territorial interests in the South China Sea. Entering into debt bondage with China is a wrong move for the Philippines.
