“Disastrous” loan agreement with China hit

By SHERWIN DE VERA
www.nordis.net

FLAGSHIP PROJECT. Officials of NIA, Chinese government, Province of Kalinga and Cagayan lead the groundbreaking ceremony of Chico River Pump Irrigation Project in Brgy. Pinococ, Pinukpuk, Kalinga on June 8, 2018. (Photo courtesy of NIA-CAR)

BAGUIO CITY — The lone senatorial candidate of the progressive coalition said the loan agreement between the government and the People’s Republic of China for an irrigation project in the Cordillera is not only “onerous” but also “disastrous” for the country.

Bayan Muna National Chairman Neri Colmenares exposed the content of the 20-year loan agreement with China for the Chico River Pump Irrigation Project which his group managed to acquire.

He said the provisions highly favors China, underscoring that “this PhP 3.6 billion loan may just be one of the many secret loan agreements between the Philippines and China which could run in the billions.”

Colmenares, who is eyeing a senate seat under Makabayan, said the 2% interest rate is exceedingly high compared to loans offered by other countries which only charge .25% per year.

“It also provides that China will not pay any taxes or charges for the entire transaction including any interest income it earns from the loan,” he added.

Besides the expensive rate and the tax free loan, an annual payment of 0.3% “Commitment Fee” and a “Management Fee“ of US$ 186,260 on top of the 2% annual interest is required.

China also demanded that payment for the loan be included in the General Appropriations Law, a usurpation of the constitutional power reserved to Congress said Colmenares.

Also stipulated in the contract is the choice for a Chinese contractor, specifically China CAMC Engineering Co. Ltd. The Bayan Muna chair explained the provision will pave for the hiring of Chinese workers and displacement of Filipino laborers.

RISING. Construction of the Chico River Pump Irrigation Project is underway and expected to be completed in three years. (Photo courtesy of Emi Carreon)

“While Philippine laws require contractors to undergo a procurement or bidding process, China simply imposed its own contractor. Para na tayong probinsya ng Tsina na kaya nilang diktahan. These kinds of agreement are humiliating to the Philippines and must be stopped,” he said.

The Makabayan senatorial candidate pointed out the danger of the vaguely worded provision under Section 8.1 which does not recognize our sovereign rights in the country and could allow China to take control of patrimonial properties should the Philippines fail to pay the loan.

The contract demands that the Philippines shall not have “any right of immunity in connection with xxx any enforcement of an arbitral award, court decision on the ground of sovereignty or otherwise is valid and irrevocably binding on the Borrower. Except (iii) those located in the Philippines and dedicated to a public or government use as distinguished from patrimonial assets and commercial use.”

“This allows China’s takeover of our patrimonial properties and resources deemed by China’s tribunal to be ‘of commercial use’,” said Colmenares, citing the experience of Sri Lanka, where China took over the Hambatota Port after Sri Lanka failed to pay its debt due to the delay in the opening of the port’s commercial use.

Included in the provisions is the admission from the country’s representative that “the Agreement does not violate any Philippine laws or rules” which pre-empts the right to challenge its constitutionality and disputes related to the contract shall be resolved by the China International Economic and Trade Arbitration Commission.

“Madali tayong kasuhan ng China sa tribunal nila, habang tayo hindi maaring i-question ang agreement sa sarili nating korte. In fact, China imposed a confidentiality clause that renders us unaware that we are being sold to China,” explained Bayan Muna Representative Carlos Zarate.

He also mentioned the prohibition under the loan agreement for the Philippines to do any act which, in the opinion of China, will materially affect the Philippines performance of its obligations.

PHILIPPINES NOT FOR SALE. Indigenous people from the Cordillera joined the protest against the China-Philippines cooperation that would lead to the further exploitation and take of ancestral lands and Philippine territory. (Photo by Loi Manalansan/Bulatlat.com)

“This could mean any act since it is solely interpreted under China’s opinion,” warned Zarate. The party-list demanded government transparency by allowing the public to access its contents and related documents.

The agreement was signed on April 10, 2018 between Ambassador Extraordinary and Plenipotenciary of China Zhaojian Hua, on behalf of the Export-Impot Bank of China, and Department of Finance Secretary Carlos Dominguez III, on behalf of the Philippine Government.

The P4.3-billion project is the first flagship infrastructure project to be financed by China under the administration’s “Build, Build, Build” program. The National Irrigation Authority claims the irrigation system 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 provinces in Northern Luzon. The project is comprised of a pump house, sub-station, transmission line, diversion main canal, lateral canals, appurtenant structures, service/access road, and terminal facilities and expected to be completed in three years- time. # nordis.net

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