Malaysian PM warns Philippines over debt to China

"If you borrow a huge amount of money from China and you can't pay it back, you know, the borrower will be under the control of the lender. So we have to be very careful with that," Malaysian Prime Minister Mahathir Mohamad told a news channel today.ABS-CBNahead of his bilateral meeting with Philippine President Rodrigo Duterte in Manila.

Mahathir, who is on a two-day official visit to the Philippines, canceled two Chinese-funded projects, including a $20 billion railway, after he took power last year, citing unfavorable terms for Malaysia. His move dealt a blow to Beijing’s “Belt and Road” infrastructure program, which has been accused of being a “debt trap” for recipient countries.

Asked about regional concerns about a Chinese “debt trap,” Mahathir said: “This is what China is accused of, but at the same time it is also a concern for borrowing countries in trying to regulate or limit the influence of Beijing.”

The 93-year-old leader also spoke of the risk of an influx of foreigners, saying it “could upset the political balance in the country.” More than 300,000 Chinese have been granted work permits in the Philippines since Duterte took office in 2016, and sees China as a key economic partner.

Mr Mahathir said that if "large numbers of foreigners" come to live and "affect the economy of a country", then "you have to rethink whether that is good or bad and what limits you need to put on them".

During Duterte’s visit to Beijing in 2016, China pledged to invest $9 billion in the Philippines. However, the Philippines has so far received only $300 million to develop dams and irrigation projects.

Earlier this week, the Philippine Senate launched an investigation into the questionable interest rates and terms offered by China, which have been highly valued by the Duterte administration.