Duterte orders review of government deals, removal of 'onerous' terms

MANILA, Philippines (Updated: 12:27 p.m.) — Justice Secretary Menardo Guevarra said Tuesday that President Rodrigo Duterte has ordered to prioritize review of contracts on concession agreements and foreign loans.

Presidential spokesperson Salvador Panelo said that the president “instructed all agencies to check and review all contracts entered into and remove onerous provisions that might be detrimental to the lives of the Filipinos.”

Panelo said Duterte gave his order during the cabinet meeting held on Monday, April 1.

Guevarra, sought for clarification, said that the contracts including “concession agreements on public utilities and foreign loan contracts” are to be prioritized in the review.

“Target provisions are those perceived to be onerous, one-sided, disadvantageous to the government, and/or contrary to public order or public policy,” the Justice secretary added.

Guevarra also said: "The first course of action should be to jointly review and renegotiate; if this is unsuccessful, legal action for rescission may be resorted to."

Duterte’s order came weeks after parts of Metro Manila and the Rizal province was hit with water crisis, its worst in years. 

The government has admitted that it has long anticipated the problem of increasing demand for water but delays in projects that would expand capacity resulted in failure to address it.

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The directive from the president also came on the heels of Senior Associate Justice Antonio Carpio’s statement that raised the alarm of risking gas in Reed Bank as collateral if the Philippine government fails to pay China in the loan agreement for the Chico River pump irrigation project.

Carpio has later added that the Kaliwa Dam project also followed a template that has set patrimonial assets as collateral.

According to the Civil Code, patrimonial assets are properties that are not “intended for some public use, and are intended for some public service or for the development of the national wealth.”

Maynilad v Republic

Guevarra said that he has already organized teams to conduct the review, but stressed that his office would need help from the Office of the Solicitor General to hasten the implementation of Duterte’s order.

The president, Panelo added, also “reiterated his vow to protect the people of the Republic of the Philippines.”

Panelo said Solicitor General Jose Calida and Justice Secretary Menardo Guevarra were also told “to study the case of Maynilad v Republic.”

Panelo said Solicitor General Jose Calida and Justice Secretary Menardo Guevarra were also told “to study the case of Maynilad v Republic.”

The said ruling, handed down by Singapore high court, ordered the Philippine government to compensate Maynilad at least P3.4 billion for the losses suffered by Metro Manila’s West Zone water concessionaire after the delayed implementation of its rebased water rates.

RELATED: Gov't asks Singapore High Court to set aside arbitral award favoring Maynilad

The amount to be indemnified by the government represents the fall in its rate of return from March 11, 2015 to Aug. 31, 2016.

In October 2018, Maynilad said that the decision attained finality after the Philippines did not appeal the dismissal of its application within the allowable 30-day period.

Guevarra has yet to comment on what prompted the president to order the review. — Kristine Joy Patag