NEDA: Review of contracts a ‘delicate balancing act’

MANILA, Philippines — As the Duterte administration plans to widen its review of alleged disadvantageous private sector contracts with the government, the National Economic and Development Authority (NEDA) said this must be treated as a “delicate balancing act” between instituting reforms and attracting investments.

“The bottom line is that it’s really a very delicate balancing act. We do want to send a strong signal that we will not be tolerating these onerous contracts,” NEDA Undersecretary Rosemarie Edillon said in a briefing yesterday.

“In fact, I think one of the lessons going forward is that there has to be some clause, a review clause at least, in these contracts especially as there will be changes going that far ahead into the future,” she added.

The government has so far placed under review the contracts of Metro Manila water concessionaires Manila Water and Maynilad Water Services Inc.

Early this week, Presidential spokesman Salvador Panelo said he is considering a review of Ayala Land Inc.’s lease agreement with the University of the Philippines (UP) for the Technohub complex in Diliman, Quezon City after “reading on the internet” that the 25-year lease agreement was disadvantageous to UP.

ALI yesterday refuted Panelo’s claims that it has been paying only P20 per square meter in monthly rentals to UP, saying that the effective lease rate paid UP is P171 per square meter.

The Department of Finance also announced that it has uncovered a lease contract with “onerous terms between Chevron Philippines (formerly Caltex Philippines) and a subsidiary of the National Development Co. (NDC).”

“But rest assured that the government knows that this is really a very delicate balancing act,” said Edillon.

Socioeconomic Planning Secretary Ernesto Pernia said the government has been receiving comments from businessmen and credit rating agencies regarding reviews of contracts of the private sector with the government.

“We have been getting some comments from businessmen as well as credit rating agencies. I guess those remarks, those comments need to be considered by the authorities,”he said.

Pernia said credit rating agencies and businessmen have expressed concern over this move by the government, saying that “these matters are very sensitive.”