Caution urged in review of contracts

MANILA, Philippines — Senate Minority Leader Franklin Drilon has called for “extreme caution” in implementing President Duterte’s directive to review all government contracts and loan agreements.

“In general, I am in favor of reviewing these proposed contracts with China and other bilateral or multilateral international agencies, like World Bank and Asian Development Bank, etc.,” Drilon said yesterday.

But he said existing and binding contracts could not simply be classified as onerous and cancelled as this would represent a clear breach of contract.

The government must avail itself of the procedure outlined in the contract, as to do otherwise would constitute a breach of the country’s obligations under the contract and would have legal and financial implications, Drilon said.

“The government must respect the sanctity of contracts. Otherwise, no country or entity would enter into contracts with us because we cannot be trusted to honor our obligations,” Drilon said.

Sen. Joseph Victor Ejercito backed Duterte’s directive but said the review must also be transparent and fair so as not to drive away investors.

Ejercito, vice chairman of the public services committee, said the review must prioritize loan contracts involving utilities like water and power projects.

Sen. Sherwin Gatchalian, chairman of the economic affairs committee, also called for caution, saying being reckless in conducting the review could damage investor confidence in the country.

He cited recent Bangko Sentral ng Pilipinas data showing the Philippines’ poor standing in terms of foreign direct investment inflows in 2018 compared with 10 Asian countries.

Gatchalian pressed anew the Department of Finance and National Economic and Development Authority to disclose to the public the full details of all loan agreements as well as the studies made to justify the contracts.

Too little, too late

Otso Diretso senatorial candidates yesterday scoffed at President Duterte’s order to review all contracts entered into by the government with firms and other countries to look for onerous or disadvantageous provisions.

Former Quezon representative Erin Tañada called the directive from Malacañang as “far too little, much too late.”

Magdalo party-list Rep. Gary Alejano said the government is putting the country and the Filipinos in great jeopardy.

Duterte has ordered the Office of the Solicitor General and the Department of Justice to review all government contracts to make sure they do not have onerous provisions that might be detrimental to Filipinos.

“Even new lawyers know that the review happens before the signing, not after. What’s the need of the review when they have signed them already,” Tañada, a lawyer, said.

“This is the government admitting that they either did not do their due diligence before signing, or that they maliciously entered into agreements disadvantageous to the country,” he added.

The Duterte administration has received widespread criticisms over loan agreements it entered with the Chinese government.