Former President Benigno Aquino III on Tuesday criticized the Duterte administration’s project loans with China.
Aquino, during a campaign sortie for opposition slate Otso Diretso in Cebu City, said that President Rodrigo Duterte is entering into dangerous territory by working with China on the New Centennial Water Source Kaliwa Dam Project and Chico River Irrigation Project.
“Marami na namang mga loans. Talagang nakatatakot ‘yung kapag hindi tayo nakabayad, pwedeng kunin ‘yung ari-arian natin,” Aquino said.
Senior Associate Justice Antonio Carpio issued a warning that “in case of default by the Philippines in repayment of the loan, China can seize, to satisfy any arbitral award in favor of China, patrimonial assets and assets dedicated to commercial use.” He said these assets may pertain to oil and gas resources in the exclusive economic zone in the West Philippine Sea, including the gas-rich Reed bank.
Aquino said the Duterte administration is facing the same “recycled” problems his Cabinet faced during his term, especially with these Chinese deals.
“Parang recycled. ‘Yung mga problemang dinaanan ko tila ginagawa ho nila ngayon,” he said.
He cited that during his administration, he inherited a deal with China for the construction of the North Luzon Railways Corporation (Northrail) in Bulacan. He ordered a review of the project that was hounded with overpricing and bribery allegations. He said the Duterte administration should have learned from that.
The former President also mentioned the clause in the Chico River irrigation project loan agreement that states Chinese laws will rule in the deal, saying this is disadvantageous to the Philippines.
“Parang hindi na tayo natuto doon sa Northrail… Nandoon na naman yung mga mali doon sa Northrail, ano ang governing law dito? Batas ng China. Saan tayo magde-demandahan kung sakaling merong hindi pagkakaunawaan? Sa artbitration ng China,” he said in a chance interview.
In Article 8.4 of the loan agreement of the two Chinese-funded projects, it states that the project shall be “governed by and construed in accordance with the laws of China.” If the two countries figure in a dispute, they can opt to go to arbitration. For the ₱3.69 billion Chico River project, China International Economic and Trade Arbitration Commission will handle the arbitration, which will take place in Beijing, China. As for the ₱12.2 Kaliwa Dam loan, the arbitration will happen in Hong Kong.
The former President added it’s a “basic” concept to pick the deal with the lowest interest rate. The interest rate for the two China-funded deals are at 2 percent.
“Iyon ang karanasan natin sa loan sa China. Tapos balik tayo doon. Parang hindi ba pwedeng maawa tayo sa sarili natin na maghanap tayo ng pinaka maganda para sa atin?” he said.