Baguio City—The Supreme Court on Wednesday required Malacañang to answer a petition of leftist lawmakers seeking to nullify the government’s $62-million loan agreement with China for the Chico River irrigation pump project in the Cordillera region.
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During its summer session here, the Cout resolved to order the Palace and several departments to comment on the petition filed last week by party-list lawmakers under the Makabayan bloc led by senatorial candidate Neri Colmenares seeking to strike down the loan agreement for being unconstitutional.
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Court spokesman Brian Hosaka said the Court gave the respondents Executive Secretary Salvador Medialdea, Finance Secretary Carlos Dominguez III, National Economic and Development Authority head Ernesto Pernia and Justice Secretary Menardo Guevarra 10 days from receipt of notice to comply with the order.
The tribunal did not immediately rule on the plea of petitioners for a temporary restraining order stopping the implementation of the loan agreement.
The suit questions the legality and constitutionality of the loan deal where the Philippines stands to lose natural gas deposits in Recto Bank or Reed Bank as collateral in case it defaults on the loan.
Petitioners argued that the agreement violates several provisions of the 1987 Constitution as it contains an express waiver of sovereign immunity over the country’s patrimonial assets in favor of China.
They said the contract specifically violates Section 2, Article XII of the Constitution, which reads: “All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the state. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the state.”
The petitioners said the assailed provisions of the agreement also violate Section 7, Article II of the Constitution, which states: “The state shall pursue an independent foreign policy. In its relations with other states, the paramount consideration shall be national sovereignty, territorial integrity, national interest, and the right to self-determination.”
Colmenares and company further stressed that this constitutional provision was violated by the “choice of China International Economic and Trade Arbitration Commission as a tribunal and the choice of Chinese law as the governing law of the agreement.”
Petitioners also questioned the confidentiality clause in the agreement, which they said was “a brazen disregard of the constitutional right of the Filipino people to information on foreign loans obtained or guaranteed by the government, and is considered inimical to the national interest” under Section 21, Article XII of the Constitution
The group added that the contract violated the constitutional preference for qualified Filipinos and existing procurement laws.
Lastly, they argued that the loan agreement violated Section 20, Article VII of the Constitution, which requires prior approval by the Monetary Board.
Petitioners cited the case of Ecuador which was forced to grant China control of 80 percent of its oil production after it defaulted on a Chinese loan for its Coca Codo Hydro Dam and also the case of Sri Lanka that surrendered to China the control of its Hambantota port also after failing to pay its loan.
Colmenares was joined by Bayan Muna Rep. Carlos Zarate, Anakpawis Rep. Ariel Casilao, Gabriela Representatives Emmy de Jesus and Arlene Brosas, ACT Teachers Representatives Antonio Tinio and Francisca Castro, and Kabataan Rep. Sarah Jane Elago in filing the petition.
The Palace said it would respond to the petition filed by the opposition lawmakers, saying it respected the constitutional duties of other branches of government.
Two weeks ago, the Palace agreed with Supreme Court Senior Associate Justice Antonio Carpio that there is indeed a law declaring Reed Bank as a patrimonial asset of the Philippines.
Presidential Spokesman Salvador Panelo said a portion of the oil and gas deposits in the Philippine-claimed Reed Bank could be seized by China should the Philippines fail to pay the multi-million-dollar loan agreement with Beijing. But Duterte’s economic managers said it was unlikely that the country would default on its loan, and that they have ensured there are safeguards in case an arbitral award is made in favor of China.
“The Philippines will never default on its loan with China as the payment for the country’s debt is automatically included in the government’s national budget,” he said.
Aside from the Chico River loan agreement, both Colmenares and Carpio also argued the China-funded Kaliwa Dam is onerous.
Panelo said the critics’ “rantings have only overshadowed the economic benefits of the projects that these loans shall fund,” calling their criticisms on China-backed loan agreements “trivial, circuitous and pointless.” With Nat Mariano
