A bullied nation begs for loans

Our country’s loan agreement with China for the Chico River irrigation project is a disgrace to our country’s honor. And it was obtained by sacrificing the sanctity of our Constitution.

Imagine a bully who seizes your fishpond despite a court decision declaring his claim of ownership illegal. Instead of raging in anger, you go down on your knees and beg the bully to give you a loan. The bully goes on to impose loan conditions that strip you of whatever remains of your dignity. You choose the bully despite the willingness of other lenders who are eager to help.


This was the virtual behavior of our government even after China had seized our exclusive economic zone in the West Philippine Sea, built military garrisons on our shoals, destroyed coral reefs that serve as irreplaceable spawning grounds of marine life in our waters, and drove away our fishermen from their traditional fishing areas. More recently, our military disclosed that over 600 Chinese ships have been circling our Pagasa Island in the Spratlys.

Our government’s actuations were plainly wrong. It agreed to set aside crucial provisions of our Constitution in order to accommodate the bully that is the People’s Republic of China.


By agreeing to keep the loan terms confidential, our government virtually obligated itself to blindfold the Filipino people. The right of Filipinos to know the terms of an indebtedness they have been indentured to pay for the next 20 years was bargained away by their own government.

Our government has no power to commit such a sacrilegious act, and its commission of such misdeed is a betrayal of public trust that amounts to a culpable violation of the Constitution.

The recent release to the public of the terms of the loan agreement — a year after it was signed and only after much public pressure — does not mitigate the gravity of the constitutional violation. The cavalier and repeated manner by which the government commits this violation in its various agreements with China is reprehensible.

By agreeing to an unconstitutional condition of confidentiality, and then breaching the confidentiality, our government has armed China with an arsenal to use if contractual conflict arises between the two countries.

Another loan term that is questionable is our country’s irrevocable waiver of sovereign immunity, which opens up the possibility of the seizure of our state properties in case of loan default. The loan agreement is very specific on the three kinds of properties that are immune from seizure — properties for diplomatic use, military use, and public or governmental use. Because the waiver of sovereignty is loosely written, the loan agreement allows China to argue that all of our other state properties, regardless of whether we domestically classify them as patrimonial or public domain, can be seized in case of default. This includes the oil-rich Recto Bank near Palawan.

There’s another problematic issue with the liberal wording of our “irrevocable waive(r) (of) any right of immunity on the grounds of sovereign or otherwise.” Our Constitution prohibits foreign ownership of our lands. But since our Constitution is our instrument of sovereignty, it’s not farfetched for China to force the argument that we’ve waived even the constitutional restriction on foreign ownership of our lands.

We are dealing with a lender country with a history of forcing its self-serving arguments despite international law to the contrary, as we’ve seen in the West Philippine Sea issue.


Our government gives the excuse that all this talk about the potential seizure of our state properties is useless chatter, because it’s impossible for our country to default on its loans. There’s a comparable scenario that demonstrates the amoral nature of this argument. Imagine our country’s richest businessman, Manny Villar, using one of his children as chattel collateral to guarantee his loan. When public uproar erupts, he dismissively says it’s impossible for him to default on his loans, anyway. Our government leaders will applaud in agreement.

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TAGS: Chico River irrigation project, Flea Market of Idea, Joel Ruiz Butuyan, PH-China loan deal
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