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Legislators caution against reneging on contracts, support arbitration

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GATCHALIAN HONASAN DRILON 1024x576 - Legislators caution against reneging on contracts, support arbitration
from left to right: Senators Sherwin Gatchalian, Gregorio Honasan II, and Franklin Drilon

SENATE Minority Leader Franklin M. Drilon cautioned against cancelling government contracts found to be onerous, after a review was ordered by President Rodrigo R. Duterte.

“I must caution that existing and binding contracts cannot simply be classified as onerous and unilaterally cancelled,” Mr. Drilon said in a statement on Wednesday.

Mr. Duterte at Monday’s 36th cabinet meeting directed the Office of the Solicitor General and the Department of Justice to review all government contracts.

While he supports the review of bilateral and multilateral agreements entered into by the government, Mr. Drilon said the government should act according to the provisions of the contracts.

“To do otherwise would constitute a breach of the government’s obligations under the contract,” he also said, noting this could send signal to other countries that the Philippine government does not honor its obligations.

“If the government thinks a contract duly executed is disadvantageous or onerous, it can renegotiate its terms, or go to court for its reformation. Or, bring it to the Ombudsman if it violates the anti-graft law. This power to review, moreover, must not be used to harass,” he said.

Senator Sherwin T. Gatchalian concurred, saying the review of the contracts should not result in the country’s withdrawal from agreements as this could reduce foreign investment.

“The review should not be meant to rescind live contracts. Reneging on contracts will tarnish the reputation of the our country in terms of attracting potential investors and the much needed FDI (Foreign Direct Investment,” Mr. Gatchalian said in a statement on Wednesday.

He said that to remedy a disadvantageous agreement, the government should follow the contract’s arbitration provisions. “I-trigger ang arbitration proceedings or provisions at doon pag-usapan kung paano ayusin ‘yung hindi tamang provision,” he said in a chance interview on Wednesday (“The government needs to trigger arbitration proceedings and there discuss which provisions need to be fixed.”)

Senator Gregorio B. Honasan II also proposed to subject all bilateral and multilateral agreements entered into by the government to a performance audit.

“Beyond review, performance audit of ALL multilateral, bilateral economic, security engagements and arrangements to determine if they have served mutual interests in the short-, medium-, and long-term,” Mr. Honasan told reporters in a phone message on Wednesday. — Charmaine A. Tadalan

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