Lagman: Water deals protected by Constitution

MANILA, Philippines — The concession deals of Maynilad and Manila Water are protected by the 1987 Constitution from any “impairment” or unilateral revision by the Duterte administration, an opposition lawmaker said on Monday.

Albay Rep. Edcel Lagman, a member of the opposition Liberal Party, said President Rodrigo Duterte’s threats to take over the two water concessionaires, should they reject the terms of a revised agreement, would violate the constitutional guarantee on the freedom to contract.

“The Constitution protects contracts from impairment by the State,” Lagman said in a statement.

“The mere say-so of the Duterte administration that the water concessions contain onerous provisions must pass judicial scrutiny, and any one-sided investigation by the administration will never suffice,” Lagman said.

He also cautioned the government that its bullying tactics against Manila Water and Maynilad might have a detrimental impact on investments.

“One of the major factors considered by potential investors is the predictability of the enforcement of government policies, and any constitutional violation of the freedom to contract derogates that certainty,” Lagman said.

‘Drive away investors’

“The President’s threats that if the water concessionaires will not accept his imposition, the government will take over the water utilities will further drive away investors,” he said.

Lagman cited a report by the Bangko Sentral ng Pilipinas showing that foreign direct investments plunged 32.8 percent from January to October in 2019.

But Justice Secretary Menardo Guevarra on Monday played down Malacañang’s threat to force new contracts on the two water concessionaires.

He said the new concession agreements being drafted by the Department of Justice would “not be absolutely imposed” upon Maynilad and Manila Water.

“These proposed new contracts will not be absolutely imposed upon the water concessionaires, as they will be given a reasonable opportunity to comment on the proposed amendments in an open and public discussion of the issues,” he told reporters on Monday.

Guevarra on Monday stressed that government takeover of water distribution services in Metro Manila “is the government’s last option.”

“These proposed new contracts intend to remove all illegal provisions and foster greater transparency and equitability in rate-setting, and should therefore provide a more stable and comfortable environment for investors,” he told reporters.