Presidential Spokesman Salvador Panelo

takes a selfie with Supreme Court Senior Associate Justice Antonio Carpio during the Integrated Bar of the Philippines National Convention at the Marriott Hotel in Iloilo City yesterday. Panelo and Carpio, who are fraternity brothers, recently engaged in a word war over Chinese loans for the Philippines. They met during breakfast and engaged in small talk, including ‘how to invade China.’

Malacañang urged critics of the controversial loan deal for the Chico River pump irrigation project to set aside politics as it decried what it described as “pointless” discussions on the agreement.

The $62-million project, which is expected to provide water supply to more than 8,000 hectares of agricultural land, was placed in the spotlight after Senior Associate Justice Antonio Carpio raised the possibility of China seizing Philippine patrimonial assets if the loan is not repaid.

Carpio said patrimonial assets, or those that are not for public use or public service or for the development of national wealth, include the gas reserves in Recto Bank, an area off Palawan also known as Reed Bank.

Officials have denied the Chico River loan would force the Philippines to surrender its territory or natural resources to China.

They have also given assurances that the Philippines would not default on its loan.

Presidential spokesman Salvador Panelo said farmers in Cagayan and Kalinga who would benefit from the Chico River project could not wait “till kingdom come.”

“Let us set aside politics and give our farmers in Northern Luzon a better life which they truly deserve,” Panelo said in a statement on Wednesday.

“Perhaps our critics should have instead done their part to contribute when they had every opportunity to do so, specially when they were holding the reins of government,” he added.

Panelo explained that only when the Philippines fails to repay its loan – a scenario that he described as “improbable, if not impossible” – would the oil and gas in Recto Bank be used to settle any outstanding balance.

“What that means is that there will be an extraction of gas and oil, a sale of the same and then a portion of the profit therefrom, which will be in the form of money, will be used to pay and satisfy the balance,” Panelo said.

“Assuming we have defaulted for just a small amount of the loan, China cannot seize all the gas and oil there but only the equivalent of the unpaid loan. It cannot go beyond the outstanding balance,” he added.

Panelo said the criticism and discussions on the loan agreement is “trivial, circuitous and pointless” because the amount involved is “low” and the deal has an inflexible annual interest rate of two percent.

He said economic managers have also ensured there are safeguards in case an arbitral award is made in favor of China.

The safeguards include allowing Philippine courts to determine if there was partiality in the arbitration proceedings, if there was fraud or collusion, or if enforcing the award would be contrary to public policy.

Finance officials have said an arbitration may take place if the Philippines defaults on its loan with China.

All smiles

Despite their opposing views on the Chico River loan, Panelo and Carpio exchanged pleasantries during a convention of lawyers yesterday in Iloilo City.

Panelo even took a selfie of him and Carpio during the convention of the Integrated Bar of the Philippines, the official organization of all Philippine lawyers.

“Exchanged pleasantries. We are fraternity brods in the Sigma Rho in UP (University of the Philippines) Law. He (Carpio) is junior brod. I was one of the senior brods who initiated him but not physical,” Panelo said.

Carpio was quoted by reports as saying that he and the presidential spokesman met at breakfast because they were staying in the same hotel.

“He (Panelo) is a fraternity brod, and we engage in the usual small talk, like what he said – how to invade China,” the Supreme Court magistrate said.

Panelo said Carpio’s remark about China was just a joke.

“How to invade China is a joke, we both made it up to make the reporters laugh. We just exchanged pleasantries,” he said.

Panelo previously called Carpio “unpatriotic” for raising the possibility that China would seize the gas in Recto Bank if the Chico Dam loan is not repaid.

Sen. Panfilo Lacson said the flip-flopping of Panelo should just be considered as entertainment.

Lacson said the good thing with Panelo is he clarifies his blunders.

He said the situation would be bad if Panelo will stick to his mistakes.

“That’s the best we can get. At least he backtracks and he corrects,” Lacson said.