MANILA, Philippines – Supreme Court Senior Associate Justice Antonio Carpio said on Thursday, March 28, that the China-funded Kaliwa dam could end up putting up Reed Bank gas as collateral.
Carpio has been sounding the alarm that the Chico River loan agreement with China, which waives immunity to patrimonial assets should the Philippines default on its loan, could mean that we would be forced to pay China with our gas and oil from the Reed Bank. (READ: Made in China: Loan terms with waivers, shrouded in secrecy)
“Well it’s the same, our assets are also collateralized in Kaliwa dam, patrimonial assets also, a different language but it means the same,” Carpio said on Thursday on the sidelines of the 17th Integrated Bar of the Philippines National Convention in Iloilo.
While the Chico river loan agreement explicitly mentions “patrimonial asset” as collateral, the Kaliwa Dam loan agreement does not.
Senatorial bet Neri Colmenares, who was the first to flag the Kaliwa Dam loan agreement, said “it is as onerous [as the Chico River irrigation project].”
These are the waiver provisions for Kaliwa Dam:
Article 5.7 The signing of the agreement by the borrower constitutes, and the borrower's performance of its obligations under this agreement will constitute commercial acts. Neither the borrower nor any of its assets is entitled to any right of immunity on the grounds of sovereign or other wise from arbitration, suit, execution, or any other legal process with respect to its obligations under this agreement, as the case may be, in any jurisdiction, except any other assets of the borrower located within the territory of the Philippines to the extent that the borrower is prohibited by the laws or public policies having force of law in the Republic of the Philippines, applicable and in effect at the signing date of this agreement, from waiving such immunity.
Article 8.1 Waiver of immunity. The borrower hereby irrevocably waives any immunity on the grounds of sovereignty or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8.5 hereof or with the enforcement of any arbitral award pursuant thereto, except any other assets of the borrower located within the territory of the Philippines to the extent that the borrower is prohibited by the laws or public policies having force of law in the Republic of the Philippines, applicable and in effect at the signing date of this agreement from waiving such immunity.
After a back and forth with Carpio over whether the Reed Bank could be classified as a patrimonial asset, the Department of Finance (DOF) admitted on Wednesday, March 27, that the gas from the Reed Bank could indeed be a collateral.
But the DOF put it this way: in the “unlikely event” that the Philippines defaults on the loan, the country could sell the gas from the Reed Bank and use it to pay China. The DOF claims the Philippines would not have to give up the territory itself.
Presidential Spokesperson Salvador Panelo called Carpio “unpatriotic” for supposedly teaching China strategies on how it could seize territories.
Carpio laughed it off and said: “Well I think you know I’d be the last person to be accused of that.” – Rappler.com