MANILA, Philippines — The Department of Finance (DOF) denied claims that loans extended by China to the Philippines were disadvantageous, saying Manila benefited from low interest rates and better terms under its loan agreements with Beijing.

In a statement, Finance Secretary Carlos Dominguez said the Duterte administration was able to secure lower interest rates and fees, plus longer grade period under its loan agreements with China compared to those obtained by the past administration.

Dominguez cited, in particular, the $211 million loan agreement for the New Centennial Water Source-Kaliwa Dam Project, which carries an interest rate of two percent per annum.

He said this interest rate was lower than the three percent per annum rate secured by the Arroyo administration under the $116.6 million loan agreement with China for the Angat Water Utilization and Aqueduct Improvement Project Phase II.

The finance chief said the Angat Dam project was completed in 2012 during the administration of former President Benigno Aquino III.

“The terms of the loan obtained by the Duterte administration are at least 30 percent better than the loan secured by the Arroyo administration, (which was) wholeheartedly accepted by the Aquino administration,” Dominguez told reporters in a text message.

Furthermore, Dominguez said that while both loans for the Kaliwa and Angat Dam have a maturity period of 20 years, the grace period for the Kaliwan dam project’s loan is seven years, longer than the five-year grace period for the Angat Dam project.

He also noted that the Duterte administration was able to negotiate a commitment fee for Kaliwa Dam equivalent to 0.3 percent of the undisbursed amount of the loan, while China charged a 0.4-percent commitment fee for the Angat aqueduct project.

Dominguez said the Kaliwa Dam project has a management fee of 0.3 percent of the loan amount, also lower than the 0.4 percent for the Angat aqueduct.

Moreover, Dominguez said the Duterte administration made sure that the government would not pay a pre-payment penalty fee for the Kaliwa dam project.

He said this is in contrast with the loan obtained by the Arroyo administration, which included a pre-payment indemnity of one percent per annum accrued on the prepaid loan, from and including the date of prepayment, up to and excluding the original repayment date, for such prepaid part of the loan.

The loan accord for the Kaliwa dam project was signed on Nov. 20 last year, while the loan agreement for the Angat aqueduct project was signed on Jan. 7, 2010.