SC junks petition seeking to void Kaliwa Dam loan deal

By John Victor D. Ordoñez, Reporter

THE SUPREME COURT (SC) junked a petition that sought to declare as illegal and to void the government’s loan agreements for the Kaliwa Dam and the Chico River irrigation projects.

In a 41-page ruling dated Dec. 7 and made public on Dec. 9, the High Court said the two petitions, filed by the Makabayan bloc in 2019, failed to present compelling arguments that the government’s $211-million loan agreement with Export-Import Bank of China for the Kaliwa Dam project and the $62-million loan with China for the Chico River Pump Irrigation project had violated the Constitution.

“(The) loan agreements have sufficiently complied with the applicable procurement laws and conform with the pertinent provisions of the Constitution,” the Supreme Court said in the decision.

The High Court noted that the loan agreements received the necessary approvals from the Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP).

It noted the MB gave its approval through a resolution in 2018 after the Department of Finance (DoF) endorsed the Metropolitan Waterworks and Sewerage System’s (MWSS) proposed loan for the Kaliwa Dam project. The board gave its final approval for the loan worth $211.21 million through a resolution in 2019.

In 2016, the Philippine government, represented by the DoF, entered into a memorandum of understanding with the Chinese government-owned EXIM Bank on loan agreements for priority infrastructure projects.

In 2019, the Makabayan bloc, led by Neri J. Colmenares and then-Bayan Muna party-list Rep. Carlos Isagani T. Zarate, filed separate petitions questioning the legality of the Kaliwa Dam loan and the Chico River project loan.

The petitioners claimed that the government ignored the Constitutional requirement of prior approval from the MB before entering into loan agreements.

They argued that the “confidentiality clause” contained in the loan agreement was prohibited by the Constitution since the issue was of national interest.

Citing Article 12 of the 1987 Constitution, the High Court said the government has the obligation to allow public access to information on government-contracted foreign loans.

“The confidentiality grants access only to government entities, but the Constitutional provision ensures broader public availability of such information, which makes disclosure exception rather than the rule,” said the court.

The High Court also ruled that the loan agreements did not violate the Filipino First Policy, which gives preference to qualified Filipinos over foreigners in the national economy.

It noted that the preference provided by the Constitution only extends to “qualified Filipinos” which does not apply to the loan agreements since the infrastructure projects limited the bidding to three Chinese contractors.

“The Constitution still ingrains a policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity,” said the tribunal.

Former President Rodrigo R. Duterte was also dropped from the list of the petition’s respondents due to his presidential immunity.

Environmental advocates have said that 300 hectares in the southern part of Luzon would be permanently flooded for the dam project, which the government expects to be a new source of water for Metro Manila by 2025.

The Kaliwa Dam is a bulk water supply project that started in 2019 and is part of the New Centennial Water Source of the MWSS.

The dam is expected to be ready for commercial use by 2023 and is to provide 600 million liters of water per day to the Philippine capital region.

Despite resistance from indigenous people’s groups, the project was given an environmental clearance certificate in 2019 from the state.

Sought for comment, Mr. Colmenares said in a Viber message: “We will continue fighting this onerous loan and prepare a possible motion for reconsideration.”