Many gov’t deals with private firms under review: Palace

Presidential Spokesperson Salvador Panelo said President Rodrigo Duterte has ordered the review of numerous existing government contracts with private firms to ensure that these are advantageous to the Filipino people. (File Photo: Office of the Presidential Spokesperson/Facebook)

MANILA — The Philippine government’s public service contracts with private companies are subject to thorough scrutiny, Malacañang said on Thursday, following controversies hounding the supposed “onerous” deals with water concessionaires Manila Water and Maynilad.

Presidential Spokesperson Salvador Panelo said President Rodrigo Duterte has ordered the review of numerous existing government contracts with private firms to ensure that these are advantageous to the Filipino people.

“Marami. Marami rin. Basta lahat ng kontratang involved, public service, titignan ‘yun (Many agreements, which involve public service, are being reviewed. Those are being reviewed),” Panelo said in an interview with radio station dzXL, when asked if Duterte directs the review of government’s deals with other private companies.

“Kasi kung hindi kaya ng gobyerno, naghahanap tayo ng mga private corporations pero kailangan ang provisions mo diyan, ang kontrata patas, not one-sided (Because if the government cannot manage it, it looks for private corporations that can help. However, the provisions of the contract should be fair),” he added.

This developed after Duterte was infuriated by Singapore-based arbitration panel’s ruling that the Philippine government must pay Manila Water PHP7.4 billion, a hefty amount that represents the actual losses the water concessionaire suffered from non-implementation of water hikes from June 1, 2015 to Nov. 22, 2019.

The Philippine government was also ordered to pay 100 percent of the amount paid by Manila Water to the Permanent Court of Arbitration and 85 percent of the utility company’s other claimed costs.

In April this year, Duterte directed the Office of the Solicitor General, the Department of Justice, and other state legal departments to look into all the government’s existing contracts with private companies and other countries.

Duterte was prompted to issue such directive earlier this year, after the Singapore high court upheld its October 2018 ruling, which orders the Philippine government to pay Maynilad around PHP3.42 billion due to disapproved water rate increases from Mar. 11, 2015 to Aug. 31, 2016.

The President’s order in April was intended to remove all “onerous” provisions included in any contracts that will “put the Filipino people at disadvantage or are in violation of the Constitution.”

Duterte can rescind ‘unconstitutional’ deals

Critics have claimed that existing and binding arrangements with private firms and other nations could not be revoked because such move would constitute a clear breach of contract.

Panelo said otherwise, noting that the President has the power to scrap any contracts that may be found unconstitutional.

“Lahat ‘yan pwede. Alam mo, sa Saligang Batas, ang pangunahing tungkulin ng Pangulo ay pag-silbihan at proteksyunan ang taumbayan (That is allowed. You know, under the 1987 Constitution, the President’s primary duty is to serve and protect his countrymen),” said Panelo, also Chief Presidential Legal Counsel.

“So on the basis of that, the President can do things that can either annul (or) rescind contracts done or arranged or agreed against the interest of the people and against public policy,” the Palace official added.

Duterte has ordered the filing of appropriate criminal, civil and administrative charges the owners and legal counsels of Manila Water and Maynilad.

He has also directed the filing of economic sabotage against the agents and lawyers of the governments involved in the crafting of the deals with the two water concessionaires.

Panelo said it was unacceptable that private firms that have existing contracts with the government seemed to be more dominant.

“Ang nakita diyan, ‘yung lifetime ng kontrata, nakalagay doon, kapag sila’y nalugi for whatever reason, eh kailangang bayaran natin sila. Saan ka naman nakakita ng ganoon? (We found that their lifetime contract states that if they incur losses, the government has to pay them for whatever reason. How could that happen?)” he said.

“Pangalawa, hindi tayo pwedeng makialam sa rates. Eh meron tayong ahensya ng gobyerno na dapat nakikialam sa rates. Hindi tayo pwede roon (Second, we cannot interfere in the rates they apply. But there is a government agency that should look into it. Such arrangement is unacceptable for us),” Panelo added.