Beijing also screening own firms in $24-billion megadeals

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Both the Philippines and China have committed to be on guard against dubious deals on joint investments through transparency in the process of implementing the projects included in the $24-billion ventures signed during President Duterte’s state visit to Beijing.

At the Management Association of the Philippines General Membership Meeting on Tuesday, the Philippines’s Ambassador-designate to China Jose Santiago Sta. Romana said “lessons were learned” in the past dealings between the Philippines and China.

“On the past experience of China and the Philippines, like in the North Rail project, the Joint Marine Seismic Undertaking and the NBN-ZTE deal, the lessons were the lack in transparency and violations of government procurement rules. The challenge really is how to avoid the same mistake, especially now that billions of dollars are involved,” Sta. Romana told the business sector.

Avoiding these “past mistakes” in carrying out the investment projects
and the economic cooperation, Sta. Romana said, is particularly pivotal now that the Philippines is reframing its relations with China through economic and trade cooperation.

To this end, the government is doing its part by putting in checks and balances, with the Department of Finance reportedly trying to devise an “accreditation system” for Filipino firms engaging in the projects committed during the state visit to China.

According to Sta. Romana, China is also undertaking a similar monitoring scheme on its own firms.

The North Rail project, started in the previous administration, was supposed to be contracted with a China state-owned agency, but did not push through because the contract was said to be anomalous.

Reportedly, after the Philippines and China “disengaged” from the project, Beijing called for the payment of a portion of the $ 500-million loan intended to finance the project, coinciding with the heightening of tensions over the Scarborough Shoal.

Sta. Romana reiterated, however, that the deals concluded between the Philippines and China during the state visit are only at the nascent stage, with feasibility studies still to be carried out. Due diligence, he added, should be practiced in the conduct of fleshing out the agreements.

The government official added that the Philippines’s contentious issues should be separated from the noncontentious ones—essentially intending to move forward on economic cooperation issues, but without allowing its territorial spat to get in the way.

“Disputes should not be at the front and center of our relations. We want to proceed with noncontentious issues, like economics, finance, culture, education and  sports, but discuss contentious issues one by one with use of quiet diplomacy,” he said.