Chico River irrigation deal hit for ‘highly favoring’ China

Former Bayan Muna party-list Representative Neri Colmenares disclosed on Wednesday an "onerous" loan agreement between the Philippines and China, which he said would "highly favor" the latter.

Colmenares, a senatorial candidate for the May midterm elections, was referring to the 20-year loan deal for the Chico River Pump Irrigation Project. It was inked by Ambassador Extraordinary and Plenipotenciary of China Zhao Jianhua and Department of Finance Secretary Carlos Dominguez last April 10, 2018.

"The loan agreement for the Chico River Pump Irrigation Project is onerous and highly favors China. It is a disaster for the Philippines," Colmenares said. "This P3.6 billion loan may just be one of the many secret loan agreements between China Philippines and China which could run in the billions."

According to Colmenares, the contract sets an annual interest rate of two percent for the US $62.086 million loan (P3.2 billion at current exchange rates but amounts to P3.6 billion as what is stated under Section 1.8 of the deal) and an annual commitment fee of .3 percent of the loan and management fee of .3 percent.

"The two percent interest rate is exceedingly high compared to loans offered by other countries which only charge .25 percent per year. On top of this, there are other fees and charges that make this loan contract really onerous," he said.

Colmenares further claimed that China has demanded that the loan will be paid in full without retention, noting that it even "dictated" that the payment must already be included in the General Appropriations Act.

"It also provides that China will not pay any taxes or charges for the entire interest income it earns from the loan," he said.

He also mentioned that China wants a Chinese firm to be the contractor for the project. Colmenares said a Chinese company would only hire Chinese nationals as workers which will lead to further displacement of Filipino workers.

"While Philippine laws require contractors to undergo a procurement or bidding process, China simply imposed its own contractor. Para na tayong probinsya ng Tsina na kaya nilang diktahan," Colmenares said.

The former lawmaker also expressed concern that the pact would "entail China's ownership of patrimonial property as the agreement does not allow immunity for patrimonial rights."

"A dangerous component of the agreement is a vaguely worded provision under Section 8.1 that does not recognize our sovereign rights in the country and could allow China to take control of our patrimonial properties should we fail to pay the loan," Colmenares said.

Colmenares called on the Duterte administration to allow public access to the official copies of all loan agreements with China.

"We challenge Secretaries Dominguez and Pernia to dispute what we have revealed by showing to the public the official copy of the Chico River loan agreement and similar agreements they have signed with China," Colmenares said.

Malacanang was asked to react on the matter, but it has yet to reply. —LDF, GMA News