Makabayan bloc to SC: Nullify China loan for Kaliwa Dam project  | Inquirer News

Makabayan bloc to SC: Nullify China loan for Kaliwa Dam project 

/ 06:47 PM May 09, 2019

MANILA, Philippines – The Makabayan bloc on Thursday asked the Supreme Court (SC) to strike down the  Preferential Buyer’s Credit Loan Agreement with China for the construction of the P18.7 billion New Centennial Water Source-Kaliwa Dam Project.

In a 51-page petition, it warned that the Philippines could become the next Sri Lanka which was forced to hand over their port to China because of unpaid loans.


MWSS: China-funded Kaliwa Dam cheaper than Japan-proposed project

The petitioners, led by Bayan Muna chairman and Senate hopeful Neri Colmenares also asked the high court to issue a restraining order while their petition is pending.



Senior Associate Justice Antonio Carpio earlier raised the alarm on the controversial loan deals entered into with China, saying that the country’s patrimonial assets are being used as collateral in the China funded Kaliwa Dam Project and the Chico River Irrigation Pump Project.

The project

Kaliwa Dam is a $231.59-billion project, of which $211.215 will be a loan from China with a two percent annual interest for 20 years with a grace period of seven years.

Under the loan agreement, the Philippines expressly waived sovereign immunities for itself and its properties.

Contract details

Article 8.1 of the agreement provides that “the Borrower [Philippines} hereby irrevocably waives any immunity on the grounds of sovereignty or otherwise for itself or its property…”


China, on the other hand has made no similar waiver.

“The loan agreement itself, along with the project it seeks to finance, while purported to be for the benefit of the water requirements of Metro Manila, will have negative impact on the Filipino people’s exercise and enjoyment of our country’s vital assets and sovereign rights,” read the petition.

Violation of Constitution

The petitioners pointed out that this is a clear violation of Article II Section 7 of the Constitution which mandates the government to take into “paramount consideration” the “national sovereignty, territorial integrity, national interest, and the right of self-determination.”

“By doing so, respondents swept aside the Constitution and gravely abused their discretion. It is clear that the choice of proper law of the loan agreement and the choice of tribunal are manifestly and grossly disadvantageous to the Philippines and one-sided in favor of China,” the petitioners said.

Confidentiality clause

The petitioners likewise denounced the confidentiality clause of the loan agreement as contrary to Article XII Section 21 of the 1987 Constitution.

“The Confidentiality Clause of the Preferential Buyer’s Credit Loan Agreement is 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,” read the petition.

The group further argued that the loan agreement likewise violates Section 20, Article VII of the Constitution, which requires prior approval by the Monetary Board.

Certified true copies

The petitioners also asked the SC to order the respondents to provide them with certified true copies of all loan agreement and other related documents executed between the Philippines and China.

Respondents in the petition are President Rodrigo Duterte, Executive Secretary Salvador Medialdea,  Metropolitan Waterworks and Sewerage System (MWSS) Administrator Reynaldo Velasco, Finance Secretary Carlos Dominguez III, National Economic and Development Authority (NEDA) Secretary Ernesto Pernia, Department of Justice Secretary Menardo Guevarra and Office of the Government Corporate Counsel Elpidio Vega. /gsg

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TAGS: Chico River, China, Kaliwa dam, latest news, Loan, Makabayan bloc, Neri Colmenares, Philippines, SC, Supreme Court
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