PRRD orders review of all gov’t contracts with private firms

FILE: President Rodrigo Roa Duterte presides over the 36th Cabinet Meeting at the Malacañan Palace on April 1, 2019. ACE MORANDANTE/PRESIDENTIAL PHOTO

MANILA — President Rodrigo R. Duterte has ordered the Office of the Solicitor General, the Department of Justice, and all legal departments to review all contracts entered into by the government with private corporations and/or countries, Malacañang said on Tuesday.

Presidential Spokesperson Salvador Panelo said this review will determine whether there are “onerous provisions” in the contract that would put the Philippines in a disadvantage or would violate the Constitution.

“All contracts, existing contracts. They will have to be subjected to scrutiny,” Panelo said in a Palace briefing but did not determine which particular contracts or how many of them will be up for review.

Panelo assured that the controversial Chinese loan agreements will be covered by the review.

However, he maintained that the PHP3.69-billion Chico River Pump Irrigation Project and the PHP4.2 billion Kaliwa

Dam are aboveboard.

“With respect to Chico and Kaliwa it has passed through many agencies — Commission on Audit, Department of Finance,” Panelo said.

Panelo allayed fears that the review of all government contracts would have an impact on potential investors saying that it will only “forewarn” them not to engage in onerous transactions.

“It will forewarn them that they cannot enter into any agreement that is in violation of the Constitution or a public policy,” Panelo said.

“The President has alerted whoever will be entering into an agreement that they should be very careful in agreeing with whoever they are contracting with, with respect to existing laws and the Constitution,” he added.

Panelo also assured that government will not incur potential penalty from canceling agreements noting that if an agreement was made in violation of the law, then it is considered void ab initio or invalid.

Meanwhile, Panelo maintained that all government contracts were reviewed “thoroughly” despite the call to review them again.

“We can always go back to it; but as far as the Department of Finance is concerned, it’s above board and they have explained it extensively at that,” Panelo said.

According to Panelo, the review “won’t take long” since legal departments could already be reviewing contracts.

Gov’t vs. Maynilad

Duterte’s call to review all government contracts with private firms stemmed after he learned that government had to pay at least PHP3.4 billion to water concessionaire Maynilad after losing an arbitration case in 2018.

Maynilad won over the government at the High Court of Singapore for revenue losses in relation to the unimplemented water rate adjustment. However, the Philippine government opted not to appeal its decision.

“He (Duterte) found out that during the Ramos administration, there was a contract between Maynilad and Republic of the Philippines and in that contract, the government, the Republic of the Philippines was prohibited into interfering, intruding into the terms of the contract,” Panelo explained.

“That’s why we lost in the arbitration tribunal and I think we were made to pay PHP3 billion something because according to the ruling the government intervened and by reason of the intervention Maynilad suffered damages,” he added.

Panelo said the President could not believe how such a contract would impose a ban on the government to take government action with respect to water supply and distribution.

“There could be collusion between lawyers of government and lawyers of the private company (Maynilad). We cannot do that, we have to prosecute them,” Panelo said.

Panelo said the reason for review is to ensure that the fate suffered by government in the case versus Maynilad would not happen again.

“Kaya mo ire-review yung kontrata ng iba kasi baka merong ganun ding provision (That’s why we’re calling for a review on all contracts because there might be a similar provision as the one in the Maynilad case),” Panelo told reporters in an interview after the briefing.