THE chairman of the Senate Committee on Economic Affairs prodded the Duterte administration over the weekend to adopt a stricter vetting system for accepting foreign aid and foreign-funded investments.
Sen. Sherwin T. Gatchalian made the suggestion after presiding over a Senate hearing last week on reported investment deals signed between Manila and Beijing officials during President Duterte’s China visit last October.
“The Philippine government has been using a loose vetting system for foreign-funded investments, which has allowed scheming foreign firms to pull off one-sided trade contracts to the detriment of the nation and the Filipino people,” Gatchalian said in a statement over the weekend.
The senator stressed the need to further improve the system for assessing foreign financing agreements and overseas development assistance to “make sure that these investment agreements are beneficial to Filipinos”.
“We will tighten the rules in terms of acquiring overseas development assistance and foreign financing. We will come up with mechanisms to protect all of us, the Filipino people,” Gatchalian said.
“We have to remember that once we sign a loan agreement, this is a loan that all of us will pay in the end. Thus, it is important to make sure these loans are beneficial to our country…that those contractors are capable and unquestionable. That will be built-in in the law that we are going to propose,” he added.
Gatchalian recalled that during the hearing on the present set up, the committee was told that the procedure goes like this: “We look for financing agencies, and when we find one, these financiers are given the free hand to name their chosen contractors and suppliers as part of their trade packages.”
“This is a revelation to me,” Gatchalian said, as he noted the admission of finance department officials that the 2016 Chinese investment deals were actually “tied” loan agreements allowing Export-Import Bank of China, as the Chinese funding agency, to pick the prequalified suppliers or contractors for the Philippine government projects.
The Senate hearing into the Philippine-Sino trade agreements, Gatchalian said, also revealed some of these prepicked contractors have “bad records”.
According to the senator, the insertion of these suppliers and contractors in foreign-funded contracts tied the hands of the Philippine government from doing an in-depth “due diligence” check on the corporate history of the handpicked foreign firms.
He added, “A number of these contractors have been discovered to have bad history, bad records in doing business in our country. Some of them are facing corruption cases or are in trouble with other agencies, some have been barred by other multilateral loan agencies, like the Asian Development Bank and the World Bank. We would have known all these issues earlier if our vetting system had been strict.”
Gatchalian was prompted to start crafting remedial legislation to correct the lax vetting system after learning there were no clear guidelines on “who should vet these suppliers or contractors, whether it’s the National Economic and Development Authority or the DOF [Department of Finance]?”
The senator said the Economic Affairs Committee is set to review the process and draft legislation to “protect us from unfair loans and unscrupulous contractors”.
“We will tighten the rules in terms of acquiring overseas development assistance and foreign financing. We will come up with mechanisms to protect all of us, the Filipino people,” Gatchalian said.