Panelo allays investors’ fears on contract review

MANILA, Philippines — Investors need not be afraid of President Duterte’s efforts to look into government contracts with businesses as long as their deals are aboveboard, Malacañang said yesterday.?

Presidential spokesman Salvador Panelo said that while the administration has the duty to look after public interest, it would uphold the sanctity of contracts that comply with the law. ?

“There is nothing to worry on the part of the businessmen, whether foreign or local, because the government will not be reckless to step into any contract that is not contrary to law,” Panelo said at a press briefing.?

“You don’t have to worry about the review because if there is nothing (unlawful about) your contracts, there is nothing to worry about.

The President will certainly respect the sanctity of contracts except only when (there are) provisions (that appear) to be contrary to law, contrary to public interest and public policy,” he said.

Panelo said any pronouncement that the government would examine, evaluate or review onerous contracts is not something that businessmen should be afraid of “because it is the duty of the government precisely to protect the interest of the Filipino people.”?

The administration has vowed to look into all business deals signed during previous administrations to determine if there are contracts unfair to the government.?

Last month, Duterte slammed water concessionaires Manila Water and Maynilad for allegedly “milking Filipinos by the billions.”

He threatened to file graft, economic sabotage and plunder charges against them.

The President said the concession contracts were disadvantageous to the public because they prohibit the government from stopping water rate hikes and allow water firms to collect damages for losses that stem from regulatory actions.?

The concession deals with Manila Water and Maynilad – major Metro Manila water distributors – were signed in 1997 and supposed to last for 25 years.

The deals were extended by 15 years in 2009 or 13 years before they were set to expire.

The Metropolitan Waterworks and Sewerage System board has revoked the extension of the concession agreements in compliance with the President’s directive.

The Department of Justice (DOJ) wants to finalize new contracts with the two water distribution firms in six months.?

The administration is also probing a lease contract between Chevron Philippines and a subsidiary of state-run National Development Corp. that supposedly allowed the energy firm to pay a monthly rental of just 74 centavos per square meter on a 120-hectare state property in Batangas.?

Last week, Duterte warned owners of Maynilad and Manila Water not to go to court to stop him from seeking new concession contracts or he would have them arrested and detained indefinitely. 

Panelo had clarified that the owners of water utilities would be accorded due process.

The Philippines dropped to 124th place out of 190 economies this year from 113th in 2018 in the latest World Bank Group Doing Business report.

The country’s rank in “enforcing contracts” slipped from 149th to 151st.