Govt should be transparent, release 9 signed foreign loan agreements — IBON

Research group IBON said the Duterte administration should immediately release to the public all nine foreign loan agreements it has already signed for infrastructure projects, especially for the upcoming Kaliwa Dam project with China. The group raised concerns of government’s transparency since it has denied IBON’s previous requests for copies of the loan agreements. The government has an obligation to disclose these contracts as a matter of public interest and protecting the country’s sovereignty, the group said.

The nine foreign loan agreements signed by the government include the Chico River Pump Irrigation and New Centennial Water Source-Kaliwa Dam with China; Pasig-Marikina River Channel Improvement, Cavite Industrial Area Flood Management, Metro Manila Subway, and North-South Railway with Japan; Panguil Bay Bridge; and the new Cebu International Container Port with Korea.

IBON research head Rosario Bella Guzman said that there is lack of transparency of government offices to disclose loan agreements signed by the government. IBON wrote a letter to the Department of Finance (DOF) in June 2018 requesting copies of the loan agreement for the Chico River Pump Irrigation Project. The DOF responded that the contract has a confidentiality clause and that the agency is not allowed to disclose details of the contract to any third party.

Loan agreements should be disclosed since the projects are public infrastructure which are supposed to be serving public interest, said Guzman. The Chico River Pump Irrigation Project, with the provisions that could be disadvantageous to the country, may become the gold standard of other loan agreements, Guzman added.

Guzman said that the contracts for other Chinese loans such as the one for the New Centennial Water Source-Kaliwa Dam Project would follow the template of onerous provisions found in the Chico River Pump Irrigation Project. The loan agreement for the Kaliwa Dam which was signed in November 2018 is yet to be made public and IBON has yet to receive a copy of the loan agreement it requested from concerned offices. Guzman added that the Php12.2-billion Kaliwa Dam will be 85% funded by China official development assistance (ODA), in other words, debt that will be paid for by the public in the future.

“China loans are one-sided and impose onerous conditions, which could result in the Philippines virtually giving up its sovereignty,” said Guzman. IBON previously raised questions on the Chico River Pump Irrigation loan agreement being governed by China laws, and that any arbitration or suit shall be heard at the China International Economic and Trade Arbitration Court (CIETAC).

 “Natural resources, including water, are the subject of these loan agreements, which makes it more problematic if conditions are lopsided in favor of foreign governments, creditors and investors,” Guzman added. Instead of prioritizing the attraction of one-sided foreign investments and loans for its infrastructure program, the government should put national interest and public welfare first over local and foreign big business interests. Government can start by subjecting the loan agreements it is signing to public scrutiny and declining those that are not mutually beneficial and do not contribute to the country’s domestic economic development, IBON concluded. ###




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