Panelo calls Carpio ‘unpatriotic’ for pointing out pro-China clauses in loan agreement

President Rodrigo Duterte's spokesman Secretary Salvador Panelo has called Senior Associate Justice Antonio Carpio "unpatriotic" for pointing out the pro-China provisions in the loan agreement covering the Chico dam irrigation project.

Panelo has drawn criticism for defending the contract which provides 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.

Carpio said the term "patrimonial assets and assets dedicated to commercial use" includes the rich gas fields in the Reed Bank, which is within the Philippines' exclusive economic zone in the disputed South China Sea.

“Ano ba ang ginagawa ni Justice Carpio? Siya ang lumalabas na unpatriotic dito. Sorry Tony ha... Parang tinuturuan niya pa ang Chinese," Panelo said on ANC.

"Wala namang loopholes, binibigyan niya ng loopholes," he added.

"Justice ka ng Supreme Court, dapat protective ka nga sa ating interest, eh parang kumakampi ka doon sa kabila in a way," Panelo said.

Sought for comment, Carpio simply laughed off Panelo's statement.

Carpio said that a decades-old law already converted oil and gas in Reed Bank into assets that are not intended for public use or public service after Panelo claimed on Tuesday that it has not been declared as such by law or presidential proclamation.

During the interview, Panelo denied claiming that there was no declaration as regards oil and gas deposits in the Reed Bank being patrimonial assets.

“Meron nga as he said and I agree meron,” he said.

Panelo echoed the Department of Finance’s position that there was no collateral included in the terms of the $62.09-million loan agreement for the Chico River Pump Irrigation Project.

He conceded though that proceeds from sale of oil and gas assets in the Reed Bank may be used as payment.

"Iyung natural gas na kinuha mo sa lupa, 'pag ibinenta mo na may share ang gobyerno, iyun ang kukunin mo bilang kabayaran sa utang mo," Panelo said.

“Ano bang kaibahan ‘yon na nagka utang ka, babayaran mo kung may pera ka sa Treasury at ‘yung gas mo at binenta mo nagkaroon ng share ang gobyerno doon mo kukunin," he added.

He said the Philippines would never default on its loan because the budget law provided automatic appropriations for debt servicing.

Panelo also said that assuming China wins the arbitration in Beijing, the decision would still have to be validated by Philippine courts before that can be enforced.  — with Nicole-Anne C. Lagrimas/NB/RSJ, GMA News