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Personalities, netizens furious as Sal Panelo sees nothing wrong with PH islands being used as collateral for loans from China

With islands of the Philippines being used as payment for loans, the PH government has the confidence that there is nothing wrong with it.

As the rift between China and the Philippines grew bigger with the recent dispute about Julian Felipe Reef, Salvador Panelo hinted that this may be the country’s way of paying its debt.

Back in 2019, during a conflict between the two countries about Recto Bank, Panelo who was the Presidential Spokesperson at that time, said that there is nothing wrong if it becomes the collateral of the loans that the Philippines made to China.

“For me [China seizing Reed Bank should there be a default in the repayment of the loan] is … not a possibility because we never reneged,” said Panelo. “We are known for paying our obligations.”

But this 2021, Chinese vessels were spotted along the Julian Felipe Reef, a reef owned by the Philippines. Moreover, the Chinese military drove a Philippine military aircraft out of their illegally claimed territory.

And through the internet, netizens have discovered Panelo’s previous statement that there is nothing wrong if a territory owned by the Philippines is used as collateral. The recent dispute between the two supposed allies is putting the Filipinos unrest as the government is the country’s resources in jeopardy.

Looking back to what Panelo said in 2019 regarding Recto Bank, a Netizen was speechless that a government official could say such a thing.

Even journalist Rowena Salvacion was shocked by Panelo’s statement.

Iris Thiele Isip Tan, a University of the Philippines College of Medicine professor was also shaken by Panelo’s statement.

With the government accepting the possibility that a territory owned by the Philippines may be used as payment for its loans, a Netizen was enraged with Panelo’s statement, even calling him a “traitor.”

Another netizen even called Panelo a mental case for his statement that there is nothing wrong with using parts of the Philippines as collateral.

In the case of the gas-rich Recto Bank, Malacañang agreed for it to become collateral of a $62-million loan agreement with China. And now that China is invading yet another territory of the Philippines, a netizen was furious that the Duterte administration could give out bits of the country’s domain just to settle its debts.

For other netizens, this act of the government is tantamount to treachery as officials are fine using islands of the Philippines as collateral.

With the growing debt of the Philippines along with the government’s futile efforts to mitigate the pandemic, a netizen concluded that after Pres. Duterte’s term, the country will be drowning in a sea of debt.

A netizen also reiterated the warnings of Supreme Court Senior Associate Justice Antonio Carpio that there is indeed a possibility of China seizing Recto Bank if the loans were unpaid.

According to Carpio, under the loan agreement, the Philippines has waived its immunity on the grounds of sovereignty. The agreement also included that the Philippines will disregard any arbitral decision, with the exception that those islands are being used by the Philippine government and its public.

Furthermore, Carpio warned that the loan agreement is subject to Chinese laws and that the arbitration, in case of dispute, shall be held in Beijing. It will then be conducted by the China International Economic and Trade Arbitration Commission (CIETAC) using CIETAC arbitration rules.

Carpio also ensured that once a dispute arises, the Philippines will have no chance of winning the arbitration because China will always have a majority in the 3-member arbitration panel.

With the matter being a public concern, the Associate Justice slammed the confidentiality clause in the loan agreement as the Philippine Constitution recognizes the right to information and access to documents and papers of the public on matters of public concern.

In 2016, The Hague ruled that Recto Bank is within the Philippines’ exclusive economic zone in the South China Sea. Hence, the country has the sole sovereign right to explore resources there. The ruling was also backed by the United Nations.

And now that the Julian Felipe Reef is being illegally occupied by China, the public is thinking: is the island being used as a settlement for the donated Chinese vaccines?


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