Neda sees review clause in contracts as formula vs onerous terms
Amid a flurry of ongoing reviews of contracts between the government and private corporations allegedly containing onerous provisions, the
state planning National Economic and Development Authority (Neda) is urging the inclusion of clauses in contracts that would require regularly review of deals and attune them to the times.
Socioeconomic Planning Secretary Ernesto M. Pernia told reporters on Thursday (Jan 23) that the government had been receiving comments from
businessmen and credit-rating agencies concerning the review of various long-standing public-private contracts later on determined by the Duterte administration to have had onerous terms.
“Those remarks, those comments need to be considered by the authorities,” said Pernia, who heads Neda.
“It’s really a very delicate balancing act. We do want to send a strong signal that we will not be tolerating these onerous contracts,” said Socioeconomic Planning Undersecretary Rosemarie G. Edillon.
“I think one of the lessons going forward is that there has to be some clause, a review clause at least, in these contracts, especially as there will be changes going that far ahead into the future,” Edillon said.
At present, the Department of Justice (DOJ) and, to some extent, the Department of Finance (DOF) have the expertise to review contracts, Pernia said.
Neda, for its part, can conduct reviews of Neda Board and Investment Coordination Committee (ICC)-approved projects as far as price
escalation and project design changes were concerned, Edillon noted.
President Rodrigo Duterte had ordered the DOJ to review and renegotiate the water distribution contracts with the two concessionaires in Metro
Manila and nearby areas, as these had been allegedly laden with provisions that were disadvantageous to taxpayers.
The DOF, meanwhile, had spearheaded the move to come up with a better lease contract between the government and the Philippine unit of global oil giant Chevron for a sprawling property in Batangas that Chevron was renting in Batangas for just 74 centavos per square meter per month.
