MANILA, Philippines — The Supreme Court (SC) was asked yesterday to strike down the government’s $62-million loan agreement with China for the Chico River irrigation pump project in the Cordillera region.
In a 67-page petition, lawmakers from militant groups under the Makabayan bloc led by senatorial candidate Neri Colmenares asked the high court to nullify the loan agreement for being unconstitutional.
They also sought issuance of a temporary restraining order (TRO) to stop implementation of the assailed deal where they claimed the Philippines stands to lose natural gas deposits in Recto (Reed) Bank as a collateral in case of loan default.
Taking a cue from arguments publicly raised by Senior Associate Justice Antonio Carpio, petitioners alleged the agreement violates several provisions of the 1987 Constitution as it contains an express waiver of sovereign immunity over the country’s patrimonial assets in favor of China.
The petitioners cited provisions of the contract showing the government “has allowed its patrimonial assets to stand as security for unpaid obligations under this Loan Agreement. ‘Collateralization’ of patrimonial property for unpaid obligations under a foreign loan contract or as an award in an arbitral proceeding is unconstitutional and illegal.”
“These assailed provisions open the possibility for China to acquire patrimonial properties in the Philippines which is tantamount to ceding in favor of China certain territories in the Philippines by virtue of our default in our contractual obligations. This situation obviously impacts negatively on our national sovereignty, territorial integrity and is inimical to our national interest,” read the petition.
Petitioners said the contract specifically violates Article XII, Section 2 of the Constitution.
They said the assailed provisions of the agreement also violate Article II, Section 7 of the Constitution, which 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.”
Colmenares and the petitioners further stressed these constitutional provisions were violated by the “choice of China International Economic and Trade Arbitration Commission (CIETAC) as tribunal and the choice of Chinese law as the governing law of the agreement.”
“In this case, Respondents have agreed to submit any form of dispute arising out of or in connection with the Loan Agreement to the China International Economic and Trade Arbitration Commission for arbitration. By doing so, Respondents betrayed the lack of sensitivity to the Constitution and gravely abused their discretion, when they acceded to the arbitration provision in the Loan Agreement which is manifestly and grossly disadvantageous to the GRP and so one-sided in favor of China. Such one-sidedness is plain even to the uninitiated eye,” petitioners argued.
Petitioners also assailed the confidentiality clause in the agreement, which they said was “a brazen disregard of the constitutional right of the Filipino people to information on foreign loans obtained or guaranteed by the government and is considered inimical to the national interest” under Article XII, Section 21 of the Constitution. – With Artemio Dumlao