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THREAD: My comments on the Chico River Irrigation Pump loan agreement signed between Ambassador Zhaojian Hua, on behalf of the Export-Impot Bank of China, and Department of Finance Secretary Carlos Dominguez III, on behalf of the Philippine Government, on April 10, 2018.
The Loan Agreement is onerous & highly favors China. It sets an annual interest rate of 2% for the Php3.6 Billion loan plus an annual “Commitment Fee” of .3% and a “Management Fee“ of US$ 186,260. China demands that the loan be ‘paid in full without counterclaim or retention.”
The 2% interest rate is exceedingly high compared to loans offered by other countries which only charge .25% per year. China is demanding that payment be automatically included in the General Appropriations Law, practically usurping the powers of Congress.
On top of the expensive rates, China still have the gall to require that the contractor be a Chinese company. the Chinese contractor would most likely hire Chinese workers, adding to an even greater influx of Chinese workers, leading to the displacement of Filipino workers.
A dangerous component of the Agreement is a vaguely worded provision that does not recognize our sovereign rights & could allow China to take control of our patrimonial properties should we fail to pay the loan, much like what happened to Sri Lanka’s Hambatota Port.
It provides that any dispute such as a delay or default in payment shall be resolved by the China International Economic and Trade Arbitration Commission (CIETAC) and shall be governed by the laws of China. It even imposes that the venue shall be in Beijing
Our children will continue paying for this highly disadvantageous loan as we get enmeshed in a debt trap in the amount of hundreds of billions of dollars from China. Ang masama rito, ginigisa na nga tayo sa sarili nating mantika, tayo pa ang pinagbili ng bawang at sibuyas.
We challenge Sec. Dominguez and Pernia to make public the official copy of the Chico River loan agreement and similar agreements they have signed with China, including those for the PhP12 billion Kaliwa Dam Project and PhP17 billion Davao Bridge Project.
