Tingog.com

George Bush and his allies collude with The House of Saud for their oil at the expense of the American public, and President Gloria Macapagal Arroyo has China and their “loans” at the expense of the Filipino public. China needs oil, America needs oil, The Philippines just needs money. Unfortunately, The U.S. hasn’t given us much since our withdrawal from Iraq, but China seems to be the new buddy in town. I bet you didn’t realize that the NBN deal, The Executive Agreement, China, the Spratly Islands, and corruption in The Philippines would be related. But oh yes, they certainly are, and to the delight of The Arroyo Administration and other corrupt officials.

Ricky Carandang is connecting the dots between the Spratly Islands and China’s loans to the tune of $8 billion (NBN was to be included). The basic premise is that President Arroyo may have given away oil and gas exploration rights in the Spratly Islands in exchange for $2 billion a year in concessionary loans lasting until the end of her term.

Seven countries claim ownership of the disputed Spratly Islands, just off of Palawan. China, Vietnam, Taiwan, Malsysia, Indonesia, Brunei, and the Philippines all claim to own part or all of the Spratlys. These overlapping claims have been a source of tension over the years since the Spratlys (we Filipinos call them the Kalayaan Islands) are believed to contain significant reserves of oil and natural gas. China was the most aggressive in pursuiung its claim. In 1999, the Philippines–under President Joseph Estrada– led an effort to prevent tensions by getting all the claimants to agree not to take actions to provoke other claimants.

But in 2003, the Philippines–now under Gloria Macapagal-Arroyo– rocked the boat that it previously steadied when it signed an agreement with China to jointly undertake seismic studies of the Spratlys and explore for oil and natural gas. Naturally, the other claimants were angry. After getting them to agree not to rock the boat, the Philippines sucker-punched them with the China deal. China’s traditional ally, Vietnam was so angry they it had to be let in to the deal to appease them.

Aside from angering our neighbors and potentially undermining regional stability, Arroyo’s action may also be illegal. Ombudsman Merceditas Gutierrez–who was then acting justice secretary–told former Senator Frank Drilon, who was then allied with the administration, that she believed that the deal violated the constitution, because while it was a deal between the state owned oil firms (PNOC of the Philippines and CNOOC of China) of the two countries, it implicitly gave China access to our oil reserves. Officers of the Foreign Affairs Department were also upset because the deal effectively strengthened China and Vietnam’s claim to the Spratlys.

What would compel Gloria Macapagal-Arroyo to sign a deal that potentially undermines regional stability, possibly grants China parity rights to oil reserves in the Spratlys that we claim to be ours, and likely violates our constitution?

How about $2 billion a year? After the Spratly deal was signed, the Chinese government committed $2 billion in official development assistance a year to the Philippines until 2010, when Arroyo is supposed to step down from office. My sources tell me that the Spratly deal was an explicit precondition to the loans.

A sizable amount to be sure, but for the Arroyo administration the China loans are particularly appealing. Not so much because the interest rates are so low and the repayment terms so lenient, but because Chinese loans do not have the cumbersome requirements that loans from the US, Japan, the EU, and big multilateral lenders have. Requirements for documentation, bidding, transparency and other details that make it very difficult for corrupt public officials to commit graft. In fact, in November of last year, those cumbersome requirements made it impossible for some government officials and private individuals with sticky fingers to avail themselves of the World Bank’s generosity.

It had gotten to the point where a corrupt government could no longer make a dishonest buck. That is until China’s generous offer came along. Given China’s laxity with certain conditions, its no wonder why almost every big ticket government project funded by Chinese ODA has been the subject of allegations of graft and corruption. There’s Northrail, Cyber Education, the Fuhua agricultural projects, Southrail, and of course the ZTE National Broadband project.

But how the Government puts it, is not in terms of loans, it is in terms of “investments”, like we are getting a gift from China. Yeah, maybe an exchange gift. The Filipino people get overpriced projects, the corrupt officials get kickbacks and commissions, China gets their money back anyway because it’s a loan, and they also get free reign with regards to the Spratly Islands.

What an exchange gift!

Manuel also tackles this issue in his latest blog post as well as in his column. As Manuel says, the cats out of the bag. Well, it’s been out for a long time, but who knew there was another cat in that bag.

Be informed!

You can watch The Correspondents episode where The Spratly connection is discussed and the implications with regards to corruption including the NBN deal.

Part 1, Part 2, Part 3, Part 4

And then we recall what The Administration released to the press during April 21 of 2007 when they signed so many agreements, including the NBN deal.

Nearly a billion dollars worth of new investments in 12 hours.

That’s the way things looked like for President Gloria Macapagal-Arroyo in her brief stay in this picturesque coastal town Saturday as she “came and went like a thief in the night,” bringing with her an avalanche of Chinese investments to the tune of $904.38 million.

The President, who arrived here in the wee hours of Saturday to keynote the opening plenary session of the Boao Forum for Asia (BFA), left at 3:30 p.m. of the same day, but not after witnessing the signing of five landmark economic agreements between the Philippines and China that, in her own words, would create new jobs for Filipinos and support infrastructure development “to raise the competitiveness of our country.”

“These commitments are testament to the progress we have made in enhancing our economic environment and the confidence of the international community in our country and economy,” she said shortly before her departure for Manila.

The five agreements were for a cyber-education project, a supply contract for a national broadband network, the second phase of the Angat Dam water utilization and aqueduct improvement project, and on mango pulp and tapioca exports.

The cyber education project, worth $465.5 million, was signed by Trade and Industry Secretary Peter Favila in behalf of the Department of Education and Dr. Kang Ke Jung of Tsinghua Tongfang Nuctech Co. as part of the ICT Cooperation between China and the Philippines.

Transportation and Communications Secretary Leandro Mendoza and ZTE Corp. Vice President Yu Yong inked the $329.5-million supply contract for a national broadband network which will improve government communications capabilities.

Mabuhay Enterprises Chief Executive Officer Antonio Tui and Guangzhou Dong Li Trading President Jianhua Li signed the $4.64-million contract for the export of mango pulp to China from 2007 to 2008 as part of the $23.2-million total package up to 2010.

Eastern Petroleum President Fernando Martinez and Guangxi Mingyang Import and Export Trade Co. Ltd. Chairman Pan Rui Jian sealed the contract for a $30-million tapioca exports to China for five years.

Also signed was the contract between the Metropolitan Waterworks and Sewerage System (MWSS) and China International Water and Electric Corp. for the second phase of the Angat Dam water utilization and aqueduct improvement project worth $56.18 million.

No need for these to be ratified by The Senate or reviewed by Congress, after all these are “Executive Agreements” and they don’t have to go through public biddings. As I’ve said, if The Senate’s goal is to enact laws with regards to this NBN controversy, start with the Executive Agreement. The reason why the procurement act was made is because of situations like this. There can be no transparency in these Executive Agreements as they stand at present, and the corrupt officials of this Arroyo Administration know it.