Since the issue to be resolved is the legality of the Philippines loaning from China for the project to be

established at the Chico River, we should base it form the constitution if it has provision that permits our
Government to loan and also to consider if there are existing laws created for such purposes.

Under Article 12 Section 1 of the 1987 Philippine Constitution, it clearly states that the goal of the
government are a more equitable distribution of the opportunities, and wealth; sustained increase in
the amount of goods and services produced by the nation for the benefit of the people; and as
expanding productivity as the key to raising the quality of life for all, especially the under privileged.

In addition from Section 2 under the same Article, the president may enter to agreements with foreign
own corporations involving either technical or financial assistance for the large scale exploration,
development and utilization of minerals, petroleum and other mineral oils, according to the general
terms and conditions provided by law, based on real contributions to the economic growth and general
welfare of the country in such agreements the state shall promote the development and use of scientific
and technical resources.

Given that the problem is very specific on the loan of the Philippines from China for the Chico River
project, the action of the Government is very timely because there is a need improve in order to protect
the properties that are affected during calamities along the Chico River.

According from Philippine Daily Inquirer, the project aims to help about 4,000 farming families by
irrigating agricultural lands trough the Chico River basin in the Northern Philippines. The aforesaid
project has gone through an Investment Coordinating Committee approval and the loan agreement was
reviewed, negotiated, and approved by the Interagency Committee composed of the Department of
Justice, the Department of Finance (DOF) and the Banko Sentral ng Pilipinas (BSP). – Finance Assistant
Secretary Tony Lambino

Upon completion, the project is envisioned to provide stable supply of water around 8,700 hectares of
agricultuaral land, benefits 4,300 farmers and their families and serve 20 barangays in the province of
kalinga and Cagayan in Northern Luzon. Therefore it is clearly and undoubtly constitutional.