(Eagle News)—-The Palace on Saturday, March 2, dismissed Neri Colmenares’ criticisms of the Philippines’ Chico irrigation deal with China, saying the senatorial bet was “just desperately seeking media mileage.”
According to Presidential Spokesperson Salvador Panelo, in the first place, the $62.09-million loan that will help fund the construction of the irrigation project that will “provide a stable supply of water to around 8,700 hectares of agricultural land, benefit 4,350 farmers and their families and serve 21 barangays in the provinces of Kalinga and Cagayan in Northern Luzon once completed” was “reviewed, negotiated, and approved by the Interagency Committee composed of the Department of Justice, the Department of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP).”
He said on the concessional rate, according to the DOF, “if we account for all salient factors and not just the nominal rate (e.g., project cost, denomination of loan, and foreign exchange depreciation risk, among others), the effective interest rates between the recently signed Japanese and Chinese loan agreements are actually quite close to each other.”
“With regard to the interest rate, on the other hand, our Chinese loans are fixed and not subject to change over time,” Panelo said.
According to Panelo, “contrary to what others believe, project debt to China is but a fraction of our project debt to Japan.”
In fact, he said by 2022, “project debt to China is estimated to be at around 4.5% of the total debt, while that of Japan will be at around 9.5%.”
On Colmenares’ allegations only Chinese workers would be hired that would lead to a displacement of Filipino workers, Panelo said based on the DOF report on procurement, China gave a list of three contractors of good standing.
He said the implementing agency could request for a replacement if necessary.
In each loan agreement, Panelo said “an arbitration clause” was also “negotiated.”
“We negotiate to make sure that the arbitration mechanism protects our interests,” he said.
“We hope the political and left-leaning opposition would exercise completed staff work (CSW) before issuing statements. It is clear that the matter has been studied at length by our economic managers, particularly the DOF, unlike Mr. Colmenares who has only shown himself to be ignorant of the intricacies of finance and immature with political pettiness,” Panelo added.