Guevarra to critics of PH loan contract with China: Don’t jump the gun
MANILA, Philippines– Justice Secretary Menardo Guevarra said critics of government worrying about the possible China takeover of the gas-rich Reed Bank (Recto Bank) in case the Philippines defaults on its P3.69 billion loan for the Chico River Project are simply “jumping the gun.”
The DOJ Chief said there is no need to worry about the possibility of the country defaulting on its loan agreement.
“I think we’re just really jumping the gun. Parang [we are] too well ahead of what may happen. I think we really don’t have much to worry,” Guevarra told reporters Tuesday evening.
“According to the DOF (Department of Finance), [there is] nothing unusual about this contract. It’s something like a template that has been used in so many other loan agreements. So, I guess we are just really worrying too much.”
“I don’t think we even have to think about that problem in the future because the intention of the government is to honor all of its loan obligations,” Guevarra said adding that the amount for the Chico River project is small.
Senior Associate Justice Antonio Carpio raised the alarm on the loan contract saying that the contract for the Chico River project “is expected to be the template for all other Chinese loans to the Philippines.”
Under paragraph 8.1 of the Loan Agreement, the Philippines expressly waived immunity over all its assets except those used properties of Philippine embassies and missions; those under Philippine military control; and those assets for “public or governmental use as distinguished from patrimonial assets and assets dedicated to commercial use.”
But Guevarra said seizure of the Reed Bank is “far-fetched” because even if, “assuming for the sake of argument” there will be a default, there are mechanisms in place to be followed such as restructuring of the loan or the arbitration.
Under the agreement, the arbitration will be held in Beijing and will be governed by the rules of the China International Economic and Trade Arbitration Commission (CIETAC).
Carpio said the Philippines’ chances of winning is small.
Guevara, however argued that enforcing an arbitral ruling in the Philippines is not immediate.
“An arbitral ruling will have to be validated by a Philippine court. So, hindi yun direchong enforcement agad [there is no immediate enforcement]. Any foreign judgment including an arbitral ruling will have to be enforced by a petition in a proper Philippine court,” he explained. /muf
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