Photo: Reed bank supposedly containing significant natural gas deposits which is said to be a patrominal assets included in recent loan agreements with China (Wikipedia)
In a recent text message sent to reporters, Senior Associate Justice Antonio Carpio says that Finance Secretary Carlos Dominguez erred in saying that we never defaulted on our loans, since we declared a moratorium on debt payments in 1983 at the height of the financial crisis under the President Ferdinand Marcos.
Actually Carpio is wrong for two reasons.
First, he misses out on the context of Dominguez’ statements. Why?.
Dominguez made the statement to allay public fears that our lenders may take possession of patrimonial assets (like the gas deposits in the Reed bank) in case we fail to pay our loans, similar to the now familiar Hanbantota port in Sri Lanka. Default must then be taken to mean surrendering our assets. Carpio does not cite any instance where actual posession of assets is taken by our lenders. Because of this, he fails to prove that a default indeed took place, merely citing loan provisions to define his assertions. He should have included this in his statement.
Secondly, we continued paying debts and no ports, banks, reefs or other assets were ever seized. We honored and continued paying our debts, even the bad and onerous ones under Marcos. The mothballed Bataan Nuclear Power Plant is an example. Had we defaulted then, the plant would have been dismantled and sold off to pay the loan. That did not happen. Were still paying it today. Where is the default?
Editors Note: Liwanag is the pseudonym of a former NGO executive based in Quezon City.