The National Economic and Development Authority (NEDA) said the government’s review of “onerous” contracts is a “very delicate balancing act,” after concerns were raised by the private sector.
Moving forward, NEDA officials said a review clause may be considered to be included in these contracts.
Ernesto Pernia, socioeconomic planning secretary, said in a press conference in Pasig City yesterday there have been comments from businessmen as well as the credit rating agencies about the review of the said deals.
“Those remarks, those comments, need to be considered by the authorities,” Pernia said.
Rosemarie Edillon, NEDA undersecretary, said the government knows that this is really a “very delicate balancing act.”
“We do want to send a strong signal that we will not be tolerating these onerous contracts,” Edillon said.
“One of the lessons going forward is that there has to be some clause, a review clause at least, in these contracts,” she added.
Pernia said NEDA does not have the authority to conduct review of these contracts as it is within the “Department of Justice’s (DOJ) territory and perhaps, Department of Finance.”
“What goes through us with respect to projects, is if there’s a price escalation, if it has been previously approved by the NEDA Board and then there are changes in the design, then those two. But for this (kind of review), it’s more of the DOF,” Edillon said.
Those comments came following the discovery of alleged onerous terms in the lease contract of Chevron Philippines on a property in Batangas, prompting a planned planned buyout by the government of the joint venture company formed for the continued lease of the property after the termination of the Laurel-Langley Agreement in 1975.
In a statement released yesterday, the National Development Co. (NDC) said with the consolidation of ownership of Batangas Land Co. Inc. (BLCI) in favor of government, any potential use for the property including lease arrangements shall be reviewed by the government.
BLCI is a subsidiary of NDC, the government’s investment arm.
