Transparency mandate on foreign loans trumps executive privilege

According to Justice Holmes “The life of the law has not been logic: it has been experience,” because the “law embodies the story of a nation’s development.”

Many salient provisions of the 1987 Constitution of the Philippines, such as those dealing in human rights, accountability, transparency as well as the curtailment of presidential powers on the one hand and the expansion of congressional authority and the protection of judicial independence on the other, are lessons learned from the national experience of licentiousness and abuse of power during Marcos misrule.

Because of the strongman’s seemingly untrammeled profligacy, for example, the Philippines has become one of the most heavily indebted countries in the world and a laggard economy in the region.

It is quite explicable then that when it comes to contracting foreign loans under the post-Marcos constitutional regime, the President and Congress are not co-equal, the return to the presidential system notwithstanding. By express constitutional provisions (Section 20, Article VII) the authorization allowed the President to incur foreign debt remains subject to the limitations as Congress by law may provide, thereby according Congress a seniority position in this power relation between the two government branches.

But plain constitutional governance also supersedes legislative control over foreign loan disclosure requirements by the very absence in the Constitution of legislative authority to limit disclosure. Pursuant to Section 21, Article XII “Information on foreign loans obtained or guaranteed by the Government shall be made available to the public” without any limitation or qualification. This rigid disclosure requirement can be better appreciated if juxtaposed with the “right of the people to information on matters of public concerns” under Section 7, Article III, which while constitutionally “recognized” is “subject to such limitations as may be provided by law.”

What is more, in the tripartite partnership among the President, the Monetary Board and Congress in the matter of contracting or guaranteeing of foreign loans created by Section 20, Article VII in relation to Section 21, Article XII, the President occupies a status even junior to the Monetary Board. Accordingly, the “President may contract or guarantee foreign loan . . . with the prior concurrence of the Monetary Board” (indicating the requirement of the Board’s concurrence before initiating loan negotiation)(emphasis mine) and “in accordance with . . . the regulation of the monetary authority.” By contrast, no such prior Senate concurrence is required when it comes to the validity of a treaty or international agreement entered into by the President.

Such control mechanism in place is again understandable from the standpoint of the same dreadful experience the nation is still smarting over. For instance, the largest single debt of the Philippines was for the financing of the Bataan nuclear power station, a white elephant constructed during the dictatorship at the cost of $2.3 billion. The station has never been in operation and the country has struggled to repay the loan for over three decades.

The strategic switch in the now “cancelled” national broadband network (NBN) project from a built-operate-transfer (BOT) arrangement (which normally does not require direct government funding) to a scheme financed by a government foreign loan has been attended by testimonies of overpricing, bribery and a $70-million “commission” for Jose Miguel Arroyo, the presidential spouse. The scandal is reminiscent of the dubious change of heart in the selection of the contactor for the Bataan nuclear power plant from General Electric (whose lower bid had already been approved by a Marcos-appointed panel before being reversed by Marcos himself) to rival Westinghouse marred by charges of some $80 million kickbacks for Marcos.

We can never afford to have a short memory of a tragedy yet so fresh because even the younger generations of Filipinos of today are still paying for the faintheartedness, apathy and canine submission of our elders.

The cogency is thus inevitable in the proposition that if in the overarching constitutional architecture of disclosure and transparency, the general rule is the right of the people to information on matters of public concerns, and an exception to the rule where applicable is the doctrinal executive privilege, an obvious exception to such an exception is the specific constitutional mandate on disclosure of information on foreign loans. Very sadly, the majority of the Court in Neri v. Senate Committee by protecting presidential secrecy has voluntarily ignored in toto the all-important constitutional distinctions with potential consequences of crisis proportion.