What are the economic risks and benefits of foreign loans during large infrastructure programs like those under Marcos Sr. and Duterte?
Answer (1)
Foreign loans can be a powerful tool for funding large-scale infrastructure projects when domestic funds are not enough. During the terms of Ferdinand Marcos Sr. and Rodrigo Duterte, foreign loans were heavily used to build roads, bridges, power plants, and transportation systems.One major benefit is that foreign loans provide immediate capital that can be used to kickstart development. This can lead to job creation, better transport systems, and more efficient economic activities. For instance, the Marcos regime saw the construction of hospitals, dams, and expressways, while Duterte’s administration built major highways and transportation hubs. These are meant to help long-term economic growth.However, the risks are significant. If the money borrowed is not used wisely or is lost to corruption (as was the case with some projects under Marcos) then the country is left with debt and very little benefit. Foreign loans come with interest, and paying them back can become difficult if the economy slows down. In some cases, the government has to increase taxes or cut social services just to make debt payments.Therefore, foreign loans must be handled responsibly. There should be transparency in how funds are used, and the government must ensure that these loans truly benefit the people. Without good governance, loans can become a burden rather than a solution.
