Colmenares hits lopsided PH loan agreement with China

Senatoriable Neri Colmenares and Bayan Muna Rep. Carlos Zarate during the press conference exposing Philippines’ loan agreement with China. (Photo courtesy of Bayan Muna Party-list Facebook page.)

By MARA S. GENOTIVA
Davao Today

DAVAO CITY, Philippines – Bayan Muna Party-list raised alarm over “highly unusual” loan agreement between the Philippines and China saying it is a “threat to national security.”

Neri Colmenares, Makabayan’s senatorial bet, was referring to the P3.6 billion loan agreement for the Chico River River Pump Irrigation Project.

It was signed by Ambassador Extraordinary and Plenipotentiary of China Zhao Jianhua on behalf of the Export-Import Bank of China and Department of Finance Secretary Carlos Dominguez last April 10, 2018.

Colmenares warned that the said agreement is highly unusual as it allows China to “take over” the country’s ports, airports, and even energy resources “in case of default.

Section 8.1 of the agreement, particularly on “Waiver of Immunity” states that the Philippines “irrevocably waives any immunity” of its patrimonial assets and assets which are for commercial use.

“This means that government properties such as the Batangas ports or any of our ports for that matter, or energy assets of the Power Sector Assets and Liabilities Management Corporation (PSALM) or Napocor (National Power Corporation), even the LRT and MRT, can be taken over by China in case we fail to pay these hundreds of billions in Chinese loans,” Colmenares said.

Colmenares recalled the case of Sri Lanka in 2017 when it turned over Hambantota port for a 99-year lease to China Merchants Port Holdings Company, a government-owned company, after struggling to pay its debt amounting to more than $8 billion.

He added that this provision cannot be found in loan agreements of the Philippines with other countries.

“China, which has been gobbling up our territories in the West Philippine Sea (WPS) is now being allowed by our very own government to gobble up our territories and public facilities in the mainland. This very unusual agreement violates our Constitution, is a threat to national security and must be voided.”

Another red flag, Colmenares noted, is the requirement being asked from the Department of (DOJ) for the issuance of a certification stipulating that the agreement is constitutional.

With such certification, he pointed out that no one could question the constitutionality of the said agreement in Philippine courts.

He added that the Department of Finance (DOF) has also agreed that any dispute related to the agreement will be filed in a Chinese arbitration body in Beijing using China’s law.

This is contrary to the loan agreements the country has entered into with other countries where both parties agree to follow the international arbitration rules.

“Sa ilalim ng loan agreement na ito, pag may dispute tayo with China dun tayo mag file sa arbitration court nila kung saan malamang talo tayo,pero yung panalo natin sa international arbitral tribunal on the West Philippine Sea ay binabale wala nila. Katusuhan yon kasi gusto ng China lagi silang panalo,” he added.

DOF Assistant Secretary Antonio Lambino shrugged off Bayan Muna’s claims saying the agreement was carefully evaluated by the Investment Coordination Committee (ICC), which is composed of the Department of Justice, the Bangko Sentral ng Pilipinas (BSP) and the DOF.

In response to Lambino, Colmenares noted: “If the agreement was really vetted as the DOF claims, why did it sign an agreement so lopsided in favor of China containing conditions which are not imposed by other creditor countries and institutions?”

Bayan Muna Rep. Carlos Zarate also questioned the confidentiality clause of the agreement which deprived the public of information about the said loan.

Section 8.8 of the agreement states that the Philippines “shall keep all the terms, conditions and the standard fees hereunder or in connection with this Agreement.”

“Tayo ang magbabayad ng loan na ito, bakit itatatago sa atin? Our loans with ADB are posted on their website while China’s loans cannot be accessed by the people who will pay for it. This is a deviation from standard international practice,” said Zarate.

Colmenares also slammed DOF’s statement as mere justification to cover up the onerous nature of the said loan agreement.

“The main issue here is that the Philippine government has allowed China to dictate the terms of these loans,” Colmenares said. Reposted by ()

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