Bayan Muna tells Aquino to slow down on plans to forge new deals with China


In the wake of President Benigno Aquino III’s exuberant report regarding his supposedly successful business and diplomatic trip to China, Bayan Muna Representative Neri Colmenares said the president should not be too eager to forge new deals.

Aquino led a delegation of almost 300 business leaders on a trip to China last August 30 to September 3 in the hopes of securing Chinese investments in manufacturing, railways, shipyards, mining and tourism.

Colmenares warned the Aquino administration to be circumspect before forging another broadband and Northrail deal with China. He said China should first investigate the anomalies concerning the 2007 National Broadband Network (NBN-ZTE) broadband deal as well as the contract on the North Rail project.

On April 21, 2007, the Gloria Macapagal-Arroyo government signed a $329 million National Broadband Network (NBN) deal with China’s ZTE Corp. The project was for the installation of a telecommunications network linking government offices throughout the country. It was finalized in China and signed by then Communications Secretary Leandro Mendoza and ZTE vice president Yu Yong, and witnessed by Arroyo herself.

Subsequent investigations in the senate revealed that the project was overpriced by about $130 million to cover commissions. Accused of involvement in the corruption scam were former First Gentleman Jose Miguel Arroyo, ex-Commission on Elections chairman Benjamin Abalos and the former president herself.

“The Chinese government was aware of the bloated overpricing and other irregularities in the NBN-ZTE deal; this is why it did not even raise a whimper when former president Gloria Macapagal-Arroyo cancelled it.

Recently, the Chinese government immediately agreed for a renegotiation of the Northrail contract which was heavily favorable to China to the disadvantage of the Philippines,” Colmenares said.

The previous ZTE-NBN and NorthRail deals

The Northrail Project, a deal financed by a disadvantageous loan of around $ 503 million from the Export-Import Bank of China and awarded to Chinese contractors, was overpriced and allegedly involved some $ 50 to 100 million in commissions and kickbacks to high-ranking government officials. Phase 1 of the Northrail project is the 32-kilometer stretch between Caloocan City and Malolos city in Bulacan.

In 2005, estimated costs as per the contract were pegged at $503 million. in 2008, it was reported however that since January 2005, the then Macapagal-Arroyo government has been paying around $400,000 in monthly interest fees.By 2008, the total cost of the project amounted to at least $ 802 million.

The lawmaker said while the Aquino government has declared its willingness to go after the culprits behind the aforementioned anomalous contracts, the the Chinese government should also reciprocate the move.

According to witnesses, ZTE officials participated in meetings with Filipino officials where commissions and irregularities were discussed.

“ZTE officials Yu Yong and Fen Yang refused to cooperate with our investigations when the Arroyo administration was still in power. The ZTE officials must be investigated by China. ZTE must not be allowed to conduct business here while it’s led by the same individuals who were involved in irregularities,” he said.

“The Aquino government should be very careful in dealing with companies that have been involved in corruption before because it it doesn’t, then it might well be repeating the mistakes and abuses committed by its predecessor.”

Treasonous oil exploration project with China

On a related matter, the lawmakers said government plans to push for a joint oil exploration project with China was tantamount to treason. Colmenares was referring to the Aquino administration’s agreement to allow Chinese government-owned firm Sino Petroleum Corp. to conduct oil exploration in the disputed Spratly Islands in the West Philippine Sea.

Trade Undersecretary Cristino Panlilio has previously explained that under the agreement, China promises to invest $50 billion over the next five years.

Colmenares said because of the Joint Marine Seismic Undertaking (JMSU), the Philippines provided China as well as Vietnam with valuable intelligence and data on the location of oil and natural gas reserves in the Spratlys. This information reportedly led China to be more aggressive in putting up structures in the area.

“I pointedly asked Sec. Jose Almendras during the Department of Energy (DOE) budget hearing if the JMSU gave intelligence information to China and he repeatedly answered in the affirmative. The Spratlys dispute was essentially spurred by the JMSU signed by then Pres. Arroyo. While the AFP is asking for billions of pesos to modernize their equipment ostensibly using the Spratlys dispute as basis, the DTI is working to give intelligence information to China. This is treason!”, he insisted.

Colmenares said Bayan Muna will stand against any plan for a joint exploration project with China and he urged the Supreme Court to immediately address the petition Bayan Muna filed three years ago. The petition challenges the JMSU agreement with China and Vietnam and calls for its revocation. (

Share This Post