MALACAÑANG on Saturday, March 2, slammed former Bayan Muna Representative and now senatorial candidate Neri Colmenares for “politicizing” the loan agreement between the Philippines and China for an irrigation project in the Cordillera.
Presidential Spokesperson Salvador Panelo said Colmenares was “desperately” seeking media mileage by finding fault at the Duterte government’s loan deal with China.
“We find it pitiful that candidate Neri Colmenares is politicizing our bilateral relations with China in aid of his senatorial bid by uttering financial nonsense at the altar of politics,” he said in a statement.
“Mr. Colmenares is just desperately seeking media mileage by unduly compartmentalizing the loan agreements of the country without the benefit of context and by maliciously labeling it as a China issue,” the Palace official added.
The statement came after Colmenares claimed that the Philippines has entered into an “onerous” and a “one-sided” loan agreement with China.
Colmenares said the loan agreement for P4.3-billion Chico-River pump irrigation project was a “disaster for the Philippines.”
The project, which broke ground in June 2018 and is expected to be completed in three years, would supply water to 8,700 hectares of land; benefit 4,350 farmers and their families; and serve 21 villages in Kalinga and Cagayan provinces.
Panelo lectured Colmenares, saying that the project “has gone through an Investment Coordinating Committee approval.”
He also stressed that the loan agreement was “reviewed, negotiated, and approved” by the Interagency Committee composed of the Department of Justice, the Department of Fimance (DOF) and the Bangko Sentral ng Pilipinas (BSP).
“Based on the report of the DOF on procurement, as part of the terms of agreement, China provided a list of three contractors of good standing and the implementing agency was given the opportunity to vet and request for a replacement, if needed,” Panelo said.
“Also, the Monetary Board approved the terms of the loan for the Chico River Project before negotiation and after signing of the loan agreement,” he added.
Panelo also explained that with regard to concessional rate, if all salient factors are accounted, the effective interest rates between the recently signed Japanese and Chinese loan agreements are “actually quite close to each other.”
He likewise noted that the interest rate on Chinese loans are “fixed and not subject to change over time.”
“For each loan agreement, the DOF mentions that an arbitration clause is negotiated. We negotiate to make sure that the arbitration mechanism protects our interests,” Panelo said.
“Contrary to what others believe, project debt to China is but a fraction of our project debt to Japan. By 2022, project debt to China is estimated to be at around 4.5 percent of the total debt, while that of Japan will be at around 9.5 percent,” he added.
Panelo then told members of the political and left-leaning opposition, including Colmenares, to exercise “completed staff work” before issuing statements.
“It is clear that the matter has been studied at length by our economic managers, particularly the DOF, unlike Mr. Colmenares who has only shown himself to be ignorant of the intricacies of finance and immature with political pettiness,” he said. (Ruth Abbey Gita/SunStar Philippines)