Malacañang on Wednesday said it will comply with the Supreme Court order for the government to respond to the petition seeking to nullify the loan agreement with China on the Chico River pump irrigation project.
Presidential spokesperson Salvador Panelo said the government "will respond properly" to the petition filed by a group led by the House of Representatives' Makabayan bloc even as he insisted on the constitutionality of the $62-million loan deal.
"The loan agreement has passed through many channels; there has been many reviews, evaluations. We feel that it's not in violation of the Constitution as alleged by the petitioner," Panelo said at a news conference.
The petitioners argued that the loan agreement violates the 1987 Constitution because it allegedly allows the "collateralization" of patrimonial assets to a foreign entity unqualified to hold Philippine lands.
They warned such assets could include ports, energy resources, and the country's natural resources.
Antonio Carpio, the most senior justice in the high court, has earlier raised concern that the Philippines may have to give up oil and gas in the Manila-claimed Reed Bank in the South China Sea in case it defaults in its payment of the loan.
Though government officials have downplayed the criticism, President Rodrigo Duterte has ordered a review of all government contracts, including loan agreements with China, for the purpose of removing any "onerous" provisions.
The 20-year loan deal for the irrigation project was inked by Finance Secretary Carlos Dominguez III and China's Ambassador to the Philippines Zhao Jianhua on April 10, 2018.
The project will provide a stable supply of water to around 8,700 hectares of agricultural land, benefit 4,350 farmers and their families and serve 21 barangays in the provinces of Kalinga and Cagayan in Northern Luzon once completed. —KBK, GMA News