Makabayan bloc goes to Supreme Court to stop P3.69-B loan deal with China

Lian Buan
Makabayan bloc goes to Supreme Court to stop P3.69-B loan deal with China
Opposition lawmakers say several provisions of the loan agreement with China for the Chico River irrigation project violate the 1987 Constitution

MANILA, Philippines – Opposition lawmakers from the Makabayan bloc on Thursday, April 4, asked the Supreme Court to stop the Duterte government’s loan agreement with China for the Chico River pump irrigation project.

Anakpawis Representative Ariel Casilao, former Bayan Muna Representative Neri Colmenares, Bayan Muna Representative Carlos Zarate, and ACT Teachers Representative Antonio Tinio led the filing of the petition on Thursday, asking the Court to immediately issue a Temporary Restraining Order (TRO).

President Rodrigo Duterte had earlier ordered the Department of Justice (DOJ) to review China loan agreements, following criticism of its supposed disadvantageous provisions, including possibly giving up gas resources in the Reed Bank as collateral for the loan.


Makabayan said several provisions of the loan agreement violate the 1987 Constitution.

It cited the confidentiality clause in the  P3.69-billion loan agreement which allegedly runs against Secton 21 of Article XII which says that “information on foreign loans obtained or guaranteed by the government shall be made available to the public.”

Makabayan also said that the Monetary Board approved the loan agreement after the fact.  Section 20, Article VII of the 1987 Constitutionsays foreign loans may be contracted “with the proper concurrence of the Monetary Board.”

Justice Secretary Menardo Guevarra had earlier said that the agreement passed through his department only after it had been anegotiated.

Colmenares pointed out that the loan agreement requires the contractor be a Chinese company. He also noted that the agreement states that China cannot be obliged to release funds to the Philippines unless the former was satisfied with compliance, which includes getting a Chinese contractor. (READ: MADE IN CHINA: Loan terms with waivers, shrouded in secrecy)

This provision, Makabayan said, violates Section 10 of Article XII which says the state shall always “give preference to qualified Filipinos” in the grant of rights, privileges, and concessions covering the national economy and patrimony.

Even the choice of  China International Economic and Trade Arbitration Commission (CIETAC) as tribunal and the choice of Chinese law as the governing law, Makabayan said, violates Section 7 Article II of the Constitution.

The provision 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.”

Aside from the Chico river irrigation project loan agreement, Colmenares and Supreme Court Senior Associate Justice Antonio Carpio said the Kaliwa Dam loan agreement with China was also onerous. –

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email or tweet @lianbuan.