TAIPEI (Taiwan News) — The debt Honduras still owes to Taiwan is from loans provided by Taiwanese banks under commercial loan agreements, Foreign Ministry spokesperson Jeff Liu (劉永健) said on Friday (Feb. 16).

These lending contracts specify the rights and obligations of both parties, as well as mechanisms for dispute resolution and jurisdiction on legal proceedings, Liu said, per Liberty Times. Therefore, even after Honduras severed diplomatic ties with Taiwan, the loan agreements remain unaffected, and it is still obligated to continue repaying the principal and interest to the banks according to the terms of the contracts.

Liu confirmed all loans are being repaid as scheduled, with no defaults. In the future, if there are any defaults by Honduras, Taiwanese banks can take action through international legal channels according to commercial loan practices, he said.

The Central American country has a debt of US$449 million (NT$15.64 billion) with Taiwan, which began accruing in 1999. The most recent loan for US$300 million was granted under former Honduran President Juan Orlando Hernandez in 2019, which was reportedly used for housing, education, and other development projects.

Honduras maintained diplomatic relations with Taiwan for 82 years before establishing ties with China.