China to PH: Pay back $500M Northrail ODA

By Willard Cheng,

Posted at Sep 25 2012 03:26 PM | Updated as of Sep 25 2012 11:26 PM

MANILA (1st UPDATE) - China has asked the Philippines to pay China back around US$500 million of its official development assistance (ODA) for the construction of the North Rail, Interior and Local Government Secretary Mar Roxas said on Tuesday.
The Aquino had previously wanted to have the contract reconfigured with the original contract found to have violated procurement laws.
At the height of the territorial dispute with the Philippines, China called back the loan.
This was discussed when Roxas met with Chinese Vice Foreign Minister Fu Ying last week.
“Sa gitna nitong kontrobersiya sa Panatag Shoal, biglaan na lang kinall (call) ‘yung ODA loan na ipinautang ng bansang Tsina para sa North Rail project. Kinall (call) ito, ibig sabihin naging due and demandable. So napag-usapan kung ano ang pamamaraan para mabayaran natin ito, may pera naman tayo at babayaran natin ito,” Roxas said in a briefing in Malacañang on his trip to China. 
“Ayon kay Secretary [Cesar] Purisima ng Finance, nagsimula na sila ng negotiations na mababayaran ito in installments over the next two years. But this was a multi-year long-term loan na biglaan na lang na-call.”
Roxas would not say if the call was due to the territorial dispute over Scarborough Shoal.
“The timing maybe coincidental pero hindi naman natin masasabi. Maayos man o hindi ang relasyon natin, nangyari man o hindi ‘yung pangyayari sa Panatag Shoal, ay maanomalya pa rin ‘yung North Rail contract. Hindi pa rin natin maisasatuloy. So I think these are individual occurrences,” Roxas said.

National Grid
Roxas, in turn, asked the Chinese side to fulfill its obligation to carry out a technology transfer to the Philippine side when the State Grid Corporation of China bought a stake of the National Grid Corporation of the Philippines.
“Ayon sa kontrata sa National Grid there ought to have been technology transfer. May mga pagte-training sa mga Pilipino na sila ngayon ang hahawak ng controls ng ating national electric grid. Kasi hindi naman komportable na mga dayuhan ang humahawak ng (electric grid)—magkaka-blackout ba, hindi? Ano ba ang… Kung magkakaroon ng rolling or kung magkaroon ng kakulangan sa supply, sino ‘yung maba-brownout? Sino ang isa-sacrifice? E mas komportable na Pilipino ang may hawak ng mga desisyon na ‘yan,” Roxas said.
“Ang sinasabi lang natin is may investment man kayo pero ayon doon sa kontrata supposed to be ite-training ninyo ang mga Pilipino na sila ang hahawak nitong mga controls na ito. So dapat tuparin lang ninyo kung ano ‘yung nasa kontrata.”
Roxas said Madame Fu vowed to consult and look into the Philippine concern.
Philippine bananas
Roxas brought up the Chinese restrictions on banana imports form the Philippines. He said the Chinese side explained the phytosanitary issues involved when they imposed the restriction but mentioned their openness to continue the importation.
“They said that this was part of their SPS or sanitary-phytosanitary protections for their domestic industry. Nonetheless, there was some mention of their continuing to be open to importing Philippine bananas. There was no talk at all about volumes, timetables, or such,” Roxas said.
Still deadlocked

Roxas also said the Philippine reiterated its claim over Scarborough Shoal during his meeting with Chinese Vice President Xi Jinping in Nanning, China on Friday.
The Chinese side did not blink as they reiterated their claim over South China Sea and its islands.
“The Philippine side reiterated our territorial claims. We said that logically because of proximity to our mainland, historically, commonsensically, and even legally because of UNCLOS we have had this claim over Panatag Shoal for all this time. China likewise reiterated their territorial claims. So on the matter of territorial claims, both sides reiterated their positions,” Roxas said.
Roxas said that “irritants” remain, pointing out that Chinese vessels remain to be in Scarborough.
“Irritants continue to be present. There is an ongoing Chinese presence in Panatag Shoal and though this has been significantly reduced, it continues nonetheless,” he said.
Roxas said “more work needs to be done” as both sides expressed their “sincere desire to prevent further deterioration” in their relations and work together in other aspects such as trade and tourism.
He said the Department of Foreign Affairs has an invitation for Minister Fu to continue discussions.
“It has been assessed by both sides that the face-to-face meeting and the messages to the leaders would restore some of the goodwill that may have been frayed over the last several months,” Roxas said.
Roxas said the role of Senator Antonio Trillanes as President Aquino’s backdoor negotiator with China was not discussed.