Philippines cancels agreement worth $5 billion with China

Manila/Beijing: Accusing that no investments were coming from China, the Philippines withdrew the railway agreements worth USD 5 billion with China. It has been revealed that new Filipino President Ferdinand Marcos Jr. has taken this decision. This recent Philippine decision is a major jolt for the ambitious Chinese scheme ‘Road and Belt Initiative’.

It is said that China has made investments worth trillions of dollars in various countries in the world under the Belt and Road Initiative, an ambitious plan launched by Chinese President Xi Jinping. But the investment has been under threat for the last few years, and many countries from Europe, Africa and Asia have started cancelling the agreements signed under the scheme.

Various reports have pointed out that Chinese investment is a debt trap. Economies of countries from Europe, Africa and Asia have been in trouble because of the Chinese debt, and Sri Lanka is a glaring example. Following the developments in Sri Lanka, many countries have adopted a cautious stance regarding Chinese investment, and the agreements cancelled by the Philippines appear to be a part of the same sentiment. Under the contract, Chinese companies were to build three railway projects in the Philippines.

President Ferdinand Marcos Jr. cancelled the agreements because the funds were not coming on time. The government indicated that funds for the projects would be raised from private investors or other countries.