By Roel Landingin in Manila

Philippines president Gloria Macapagal Arroyo has ordered a halt to fresh borrowings from China and other lenders for big infrastructure projects as she struggles to ease rising political tensions triggered by a kickbacks scandal surrounding an aborted $330m deal with a Chinese telecommunications company.

Her spokesman on Tuesday said the president had issued a directive to put on hold official development assistance (ODA) loans for 11 major projects that have not yet been formally signed with creditors so the government can explore other sources of funding.

"We are putting on hold all ODA loans which are not yet finalised. If these projects are really important, we will source funding locally," said Ignacio Bunye, the spokesman. He said the government had enough money of its own because of new and higher taxes put in place in 2005 and 2006.

The surprise move is widely seen as part of the government's efforts to address public wariness over allegations of widespread corruption that go with foreign-assisted projects, particularly those funded by China which nominates suppliers and contractors without competitive bidding.

Full Story...

Posted by dcjaya at February 20, 2008 7:01 PM