Duterte orders SolGen, DOJ to review China loan agreements, other gov’t deals

President Rodrigo Duterte has ordered the Solicitor General and the Department of Justice to review of all contracts entered into by the government including the loan agreements with China, Malacañang said on Tuesday.

Duterte's spokesperson Salvador Panelo said the President directed Solicitor General Jose Calida, Justice Secretary Menardo Guevarra and all legal departments to check and review all contracts entered into with private companies and/or countries to determine whether there are onerous provisions that are disadvantageous to the Filipino people or in violation of the Constitution.

Panelo did not say how many contracts will be subject to review but Guevarra identified the concession agreements on public utilities and foreign loan contracts as priorities.

Asked if the China loans were part of the review, Panelo said: "Definitely, any contract."

"As these are contracts, the first course of action should be to jointly review and renegotiate; if this is unsuccessful, legal action for rescission may be resorted to," Guevarra said in a statement.

There have been questions on the terms of the $62-million Chico River pump irrigation project which are allegedly lopsided in favor of China. Environmental groups and party-list group Bayan Muna also said the China-funded Kaliwa Dam project will displace indigenous people and submerge villages in Rizal and Quezon provinces.

The Makabayan bloc last week announced plans of challenging the Chico River loan deal before the Supreme Court, whose most senior justice Antonio Carpio called attention to the provision which states that in case of default, China could seize, to satisfy any arbitral award in its favor, patrimonial assets and assets dedicated to commercial use of the Philippine government.

Panelo, however, said on Monday that the terms of the loan agreements were "competently and fully negotiated" by the Philippines and China "on equal footing."  

Panelo said the review will not dampen investor confidence in the Philippines.

"On the contrary, it will forewarn them that they cannot enter into any agreement that is in violation of the Constitution and public policy," he said at a news conference.

The Palace spokesman said Duterte's order stemmed from the President's criticism of the provision in the concession agreement with Maynilad Water Services Inc. which won last year an arbitration case over its P3.44-billion indemnity claim from the Philippine government.

Maynilad scored victory in October 2018 at the High Court of Singapore over the P3.44-billion compensation it sought from the government for revenue losses as a result of the unimplemented water rate adjustment.

Guevarra said the President was "upset" about a provision in the concession agreement that if the government interferes in any manner that will reduce or delay the implementation of agreed water rates, the government will indemnify the utility company for any losses suffered.

"The President could not believe how can a contract like this entered by the government imposing a ban on the government to take government action with respect to water services," Panelo said, adding the Duterte government will go after those who crafted the concession agreement during the Ramos administration.

"There could be collusion between the lawyers of government and the lawyers of the private company. We cannot do that. We have to prosecute them." —NB, GMA News