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nonerous' Kaliwa Dam loan
DoF reiects claim of
THE Department of Finance (DoF) said
that the government maintains "strict
standards" when dealing witl foreign
lenders, rejecting claims by a Iegislator
that the loan agreements for t}le Kaliwa
Dam and Chico River Pump lrrigalion
Projects havd "onerous" provisions.
In a statement TuesdaY, Finaace Un-
Mark Dennis YC. Joven
said t'he structure of water concession
agreements, which are public-private
partnership @PP) contracts, "is very dif-
fereny' from that of omcial development
assistance (ODA) fi nancing agreements
which the government enters to with
countries and multilateral lenders
are governed by international laws
Deputy Minority Leader and BaYan
Representative Carlos Isagani T.
has claimed that the loan agree-
for the China-funded Kaliwa Dam
Chico River Pump lrrigation Proj-
contain "onerous provisions," and
be reviewed by Malacaiang. He
to tbe waiver of sovereign im-
munity, the interpretation of the terms
Chinese law, and provisions out-
the procedure for arbitration in
the event of disputes.
Mr. Joven said such provisions are
sta[dard on all loan agreements entered
into by the Philippines with other coun-
tries and that the choice ofgoverninglaw
in interpreting the agreement "is often
the law of the lender, as seen in our loan
agreements with chi[a, JaPan, Korea
and France, even during past administra-
tions."
"There is nothing unusual with this
provision, as it is found in loan agree-
ments with several countdes,'"he said,
adding that "lhese choice of law provi-
sions are essentialto international agree-
ments with a commercial nature because
of tlle presence of a foreign element. On
the other hand, this is not necessary in
the case of a water concession contract,
which is governed by domestic law."
He also said the choice of arbitration
venue, which in this case is Hong Kong,
are determined on a per-loan agreement
basis as a precaution against default by
the borrower.
"Regardless of the venue of arbitra-
tion, the usual international arbitration
rules apply, such as the nomination of
three impartial arbitrators from among
hundreds of arbitrators from Europe,
US, Latin Americ4 and other countries
like Singapore and the Philippines," he
said.
He saidthe government is responsibly
managing its debts both ftom local and
foreign sources by maintaining healthy
a
ratio of debt to the size of the economy,
culrently at 37.670 as of first half of 2019
"The country borrows from other
countries to talte advantage of conces-
sionat, or cheaper. financing... The in-
offered by foreign countries
lerest ra Les
are way lower than anlthing the p vate
sector can offer. Borrowing at lower
interest rates means having to pay less
Ior the loans and thereby freeing up
more governrlent resources for other
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productive investments," Mr' Joven
said.
He said added that all loan agreements
signed for projects under the "Build,
Build, Build" program are published on-
line in the interest oftransparency.
'Althbugh we will find that the loan
agreements for the Kaliwa Darn and
Chico River Pump Irigation Projects do
contain confidentialii clauses, they are
accompanied by specific provisions stat-
s ing that the agreements may be releasec
i 'in accordance with any Philippine law
The Philippine Constiiu lion mandate:
disclosure of in"formation relating to for'
eign loans," he added.
ln a staternent Monday, the Metropol
itan Waterworks and Sewerage Syste[
(MWSS) said [he conslruction of Kaliwi
Dam willprevent anotherwater crisis fol
Metro Manila.
. Citing an analysis, it said the capaciq
of Angat Dam,.a major source of Metr(
Manila's water, will no longer be enougl
"to satisfy the water demand of Metrt
Manila between 2020 and 2025."
"Taking into account a supply buffe
of15%, the Angat supply capaciry vrill br
insuffrcient before 2020. These number
illustrate the need for a large water suppll
source. The events since March 2019 havi
only confirmed said projections;'it said.
Mearwhile, MWSS said lhal the socia
and envirotnnenlal impacls of the Kaliw
Dam project will be minimal comparet
to the earlierplan ofan irltegrated Kaliw
and Laiban Dam Syst(rm in 2013
It said ils consultations wilh the in
digenous people in Quezon and Riza
provinces "reached a positive outcome
in December after they adopted a resoll
tion ofconsent to tlrc prcject. - Beatrio
'
M. Laforga