MANILA, Philippines?The government has put on hold the P18.7 billion Laguna Lake Rehabilitation Project for further review despite a go signal given by the Department of Justice.

?Yes the DoJ confirmed that that's a legal transaction but I'm in coordination with the Secretary of DENR to review the project. So we're putting it on hold,? Finance Secretary Cesar Purisima told the Senate finance committee during its initial deliberations of the proposed P1.645-trillion national budget for 2011.

DENR is Department of Environment and Natural Resources.

But while in the process of review, Purisima said the government will pay the ?commitment fees? for this project. He did not say, however, how much this would cost the government.

The lake project was tagged as among the so-called ?midnight deals? of the previous Arroyo administration.

But the justice department issued an opinion affirming earlier findings that the Laguna Lake project, funded through an Official Development Assistance, was considered an executive agreement and therefore not covered by the Government Procurement Act that required public bidding.

The supply contract was signed by the DENR and BDC, a Belgian firm, for dredging the lake and the construction of a ferry system.

Committee chairman, Senator Franklin Drilon, raised the issue of the Laguna Lake project when he questioned a lower capital outlay allocated for next year, which is P196.6 billion or lower by P12.8 billion compared to the current year's budget.

Drilon noted the reduction in the capital outlay while significant increases have been made in the budget for social and debt services.

At this point, the senator cited the P18 billion that the government had to borrow from Belgium just to fund the rehabilitation of the Laguna Lake project.

?We all know that dredging is the biggest source of corruption...and yet, we are borrowing from Belgium just to undertake this kind of project?? asked Drilon.

?Why are we reducing our capital outlay given the fact that we need infrastructure...and yet we're approving an P18-billion dredging of the Laguna lake,? he further said.