Duterte seeks review of government contracts

President Rodrigo Duterte has ordered a review of all government contracts to remove any “onerous” provisions detrimental to public interest, Malacanang said yesterday.
The president, who met with his Cabinet on Monday, directed Solicitor General Jose Calida and Justice Secretary Menardo Guevarra to study, among others, the arbitration case involving Maynilad Water Services Inc. and the Philippine government, according to Palace spokesman Salvador Panelo.
“He (Duterte) directed the Solicitor General, the Department of Justice secretary, and all legal departments to review, evaluate, scrutinise every contract entered by the government and/or each agency with private corporations and/or countries, and determine whether there are onerous provisions in the contract that will put the Filipino people in disadvantage or in violation of the Constitution,” Panelo told reporters.
“He reiterated his vow to protect the people of the Republic of the Philippines,” he added.
Panelo said Duterte found out that the contract with Maynilad prohibited the government from interfering or intruding into the terms of the contract.
“That’s why we lost in the arbitration tribunal. And I think we were made to pay P3.5bn because according to the ruling, the government intervened. And by reason of the intervention, Maynilad suffered damages,” Panelo said.
In October 2018, Maynilad scored a victory at the High Court in Singapore over the P3.44bn compensation it sought from the Philippine government for revenue losses as a result of the unimplemented water rate adjustment.
The water company said the decision became final after the Philippine government opted not to take the case to the Court of Appeals, the upper division of Singapore’s Supreme Court.
Panelo said the Duterte administration would prosecute those behind the “onerous” contracts between the Ramos government and Maynilad.
“We can prosecute. That contract was entered into by the government and drafted by lawyers of the government. That could be collusion between the lawyers of the government and the lawyers of the private company. We have to prosecute them,” he said.
“That is a very onerous provision when you prohibit your own government from interfering with the terms of the contract. You cannot even do anything when there are losses.”
Guevarra said the review would focus on “certain provisions of the concession agreement that unduly tie the hands of the Republic.”
Duterte’s order came weeks after parts of Metro Manila and Rizal province were hit with water crisis.
The president’s order to review all contracts came on the heels of Senior Associate Justice Antonio Carpio’s warning that the country could lose gas in Reed Bank if the Philippine government failed to pay the loan it got from China for the Chico River pump irrigation project.
Carpio said the Kaliwa Dam project also followed a template that sets patrimonial assets as collateral.
Panelo said the review would also include the government’s loan agreements with China.
“Yes, because even if it’s executed, even if it’s in violation of the Constitution, you can rescind it, you can strike it down. Ask the court to rescind,” he told reporters.
“In other words, the president is warning all and sundry that for as long as he is the president, he will not allow anything that will go against the interest of the Filipino people. He will use the Constitution, all the powers given him to protect the Filipino people and to serve them faithfully,” the Palace official added.
Panelo expressed confidence that the review of government contracts would have no impact on potential investors.
“As I have said some time ago, the considerations being looked at by potential investors are one, the peace and order situation; the lack of bureaucracy or bureaucratic red tape; and the business climate,” he said.
“On the contrary, in fact, it will forewarn them that they cannot enter into any agreement that is in violation of the Constitution or public policy.”