MANILA, Philippines — Malacañang yesterday called Senior Associate Justice Antonio Carpio “unpatriotic” for saying China could seize resources in Recto (Reed) Bank in case of a default in loan payment for the $62-million Chico River irrigation pump project – but got an instant rebuff from the magistrate.
Carpio stood his ground and said he is right on Recto Bank.
Presidential spokesman Salvador Panelo chided Carpio for “coaching” China on its next move when the latter raised the possibility of Philippine patrimonial assets being seized because of unsettled obligations.
Initially insisting that Recto Bank was not a patrimonial asset, Panelo had to admit his mistake after being reminded by Carpio of a 1972 law that converted potential oil and gas finds in Recto Bank to patrimonial assets that could be sold domestically or internationally.
“He said there’s a law, but even if there’s a law, it doesn’t alter the situation,” Panelo told ANC, insisting that a lender has the right to impose terms on a borrower.
He said there would be no problem if the government decides to use its share in the proceeds of natural gas to repay the loan.
A state-owned asset is patrimonial if it is not for public use or public service, or for the development of national wealth.
“He is the one who appears to be unpatriotic here. It was as if he was coaching the Chinese. There are no loopholes but he was enumerating the loopholes,” Panelo said.
“You are a justice of the Supreme Court. You should be protective of our interests. But you seem to be siding with the other camp in a way,” he added.
Finance officials have denied that the Duterte administration had offered natural resources as collateral for the loan. They have also assured the public that the Philippines would not renege on its loan.
“The Department of Finance challenges critics to look and study the credit history of the Philippines. If you look at it, we’ve never had a history where we renege on our obligations, even during the most difficult times,” Finance Undersecretary Bayani Agabin said at a press briefing.
Even if the Philippines fails to settle its obligations, it would have to turn to arbitration with Beijing.
“Any decision by the arbitral tribunal has to be submitted to a court in the Philippines before it could take effect. This is what we call enforcement of an arbitral award. This will protect us from unfair treatment during arbitration,” he added.
Agabin also pointed out that a waiver of sovereign immunity does not permit any foreign party to seize the Philippines’ natural resources.
“It only means that the Philippines’ counter parties in a deal are allowed to bring the case to court if the Philippines fails to pay its debts,” the finance official said.
Finance Assistant Secretary Antonio Lambino III said an arbitration is “highly unlikely” because the Philippines is capable of repaying the loan.
Finance Undersecretary Mark Joven said the Philippines trusts China to comply with the terms of the loan agreement.
“I guess we rely on the good faith of China to comply with the provisions of a loan agreement which they signed,” Joven said, and that the Philippines expects to sign more agreements with China.
No harassment
Meanwhile, the chief of the Northern Luzon Command (Nolcom) said there were no official reports of harassment of Filipino fishermen by Chinese forces at Bajo de Masinloc, contrary to claim by a filmmaker and former Bayan Muna congressman Neri Colmenares,
“We have coordinated with the Bureau of Fisheries and Aquatic Resources and initially, there were no reports of Filipino fishermen being subjected to attack of Chinese water cannons and so far, there were no sightings of dredging ships in the waters of Bajo de Masinloc or in the West Philippine Sea,” Nolcom commander Lt. Gen. Emmanuel Salamat said in a statement.
“A campaign video of a politician has been circulating on the internet that is targeting supposed ‘issues’ between China and the Philippines with regard to the disputes/harassment happening against Filipino fisherfolk on the waters of West Philippine Sea, specifically at Scarborough Shoal, also known as Bajo de Masinloc,” he said. Bajo de Masinloc is also called Panatag Shoal.
“Nolcom aims to clarify these intriguing issues which were mentioned without proper substantiation as viewed from his campaign video. Issues like the presence of China’s dredging ships and Chinese harassment of Filipino fishermen in Zambales were heavily highlighted in the video,” he said.
He said politicians “should not exploit sensitive national issues such as these if they are not backed by a solid foundation and proper confirmation just to suit their own benefit.”
In Dagupan City, Kabayan party-list Rep. Tom Villarin urged the administration to file a diplomatic protest against Beijing for the reported harassment of Filipino fishermen, saying no further verification is needed as the fishermen themselves had complained about the Chinese activities.
“We should not say we still have to prove the harassment because the fisherfolk themselves are saying they were harassed,” Villarin said.
He said the reported cases of harassment occurred within the Philippines’ exclusive economic zone, as reaffirmed in a ruling in 2016 by a UN-backed international arbitral court.
Test case
He also maintained a separate complaint filed with the International Criminal Court (ICC) by former foreign affairs chief Albert del Rosario and former ombudsman Conchita Carpio-Morales against Chinese President Xi Jinping for Beijing’s massive island-building activities in the South China Sea “is a test case” for a sovereign country to take on the Asian giant.
“We have done this in 2016 when the Philippines won in the arbitrary tribunal in a case against China,” he said.
While it’s still too early to tell if the ICC case will prosper, Villarin said that “beyond symbolism it’s really like asserting our rights as sovereign country, so it’s high time that we did that.”
In a resolution, Magdalo party-list Rep. Gary Alejano said the government should disclose to the public the different loan agreements with China as well as the different assets or natural resources included as collateral for Chinese loans.
“The overzealous preference of the administration to secure loans from China to fund its numerous infrastructure projects at higher interest rates was justified by the administration as a means towards creating warmer ties with China, however, too much dependence on China has raised concerns after the fate of numerous countries who have availed of loans from China succumbed to debt,” said Alejano in House Resolution No. 2531.
“The worries that the Philippines might fall into China’s debt trap was amplified after government officials intimated that there is nothing wrong with using the country’s natural resources as loan collateral to China,” Alejano pointed out.
Sorsogon Bishop Arturo Bastes, chairman of the Catholic Bishops’ Conference of the Philippines (CBCP) episcopal commission on missions, said the administration is steering the country into a “debt trap.”
“China is preparing a deliberate trap for our country. If we cannot pay our huge debts, of course they will simply dictate to our government: give up your rights to the Panatag Shoal. Good-bye, Panatag Shoal,” the prelate said. – Jaime Laude, Cecille Suerte Felipe, Eva Visperas, Edu Punay, Ding Cervantes, Artemio Dumlao