MANILA, September 29, 2009
(STAR) By Ana Marie Pamintuan - The ZTE scandal has been “a learning experience” for both China and the Philippines, and Beijing is ready to move on, according to Chinese Ambassador Liu Jian-chao.

But the Philippines should lead the way in the proper process of doing business in the country, Liu told The STAR in an interview ahead of the 60th anniversary of the People’s Republic of China on Oct. 1.

“We hope to get things done within the legal framework of the country,” Liu said, adding that China is prepared to “do the right thing.”

“But it should be the Philippines that should tell us what is the right way,” he said.

Public bidding for government contracts? “Okay,” he said, “we can do that.”

Transparency? “We want all projects to be clean, to be transparent, and to be acceptable to all sectors of (Philippine) society,” he replied.

The 45-year-old Liu, former foreign ministry spokesman and head of the ministry’s information department, emphasized that bilateral relations are strong in all aspects.

He noted that the two countries share the same positions on many international issues such as climate change and the financial crisis, and cooperate in many aspects including fighting terrorism and transnational crime.

About 160,000 Chinese visited the Philippines in 2008, and the number is up by 30 percent so far this year. The two countries are currently working on an agreement for the mutual recognition of academic degrees.

Chinese President Hu Jin-tao has emphasized the need to increase aid to developing countries. Chinese grants are given mainly to the poorest countries, although the Philippines has received a minor share of about $4 million.

Liu said the Philippines is the largest recipient of Chinese concessional loans, amounting to $1.8 billion from 2005 to 2010. But Philippine utilization of the loan is on hold because of the aborted $329-million ZTE deal, which was supposed to be financed by China’s Export-Import Bank.

Liu admits that the ZTE bribery scandal was “a negative, divisive issue.”

“But it does not really affect the aspirations and desire of the two governments to strengthen relationships,” he said.

Unlike other foreign sources of loans and official development assistance (ODA), China does not attach conditionalities to its aid, such as requiring transparency or democratic reforms. Beijing considers such conditionalities as intervention in the internal affairs of a sovereign state.

But the absence of such conditionalities, plus the lack of a monitoring system to ensure that its loans and grants are not misused, have made China an ideal source of foreign funding for corrupt regimes in developing countries.

Chinese loans in fact also carry one requirement: the contractors must be Chinese.

In the case of the national broadband network project in the Philippines, the winner was Shenzhen-based ZTE, or Zhongxing Telecommunication Equipment, China’s largest in this field and one of its multinational companies.

Liu said Chinese companies were “upset” by ZTE’s experience in the Philippines.

“But I think the Chinese government and companies have a long-term view of bilateral cooperation,” Liu said. “Although upset, they are still enthusiastic and interested about working with the Philippine side.”

Several Chinese projects in the Philippines are on track, among them the $90-million Agno River Integrated Irrigation Project and the $100-million water utility aqueduct along the same river.

ZTE was not investigated by China for the botched broadband deal, Liu said, because “we were never asked to investigate” by the Philippines.

“This is a learning experience for all the parties,” Liu said.

Road tax eyed for 'Ondoy' fund By Christina Mendez (The Philippine Star) Updated September 29, 2009 12:00 AM

MANILA, Philippines - Sen. Miriam Defensor-Santiago filed a bill yesterday appropriating P10 billion to fund disaster efforts in the wake of tropical storm “Ondoy” that caused massive destruction and brought record-breaking rainfall last weekend.

Dubbed as the Ondoy Fund, P8 billion of the appropriation will come from proceeds of the road user’s tax while the remaining P2 billion will be sourced from local government units.

Santiago also outlined guidelines in her bill for allocation of the Ondoy Fund, stating that priority would be given to the construction and repair of infrastructure such as roads and bridges, and other projects such as drainage works and resettlement centers; and the funding for aid, relief, rehabilitation and livelihood of the typhoon victims.

Senate President Juan Ponce Enrile said Santiago’s bill would still need a counterpart from the House of Representatives where all appropriation bills must originate.

The Senate has also approved a resolution enjoining every senator to donate at least P1 million from their Priority Development Assistance Fund to help the victims of Ondoy.

Senators Noynoy Aquino and Francis Pangilinan pointed out that while they want to give a portion of their PDAF, they have not received their PDAF allocations for this year and the previous years.

A majority of the senators present in yesterday’s session voted in favor of Senate resolution 1378, which cited The STAR report that tropical storm Ondoy left a trail of 95 people dead, 29 missing and some 247,555 affected families.

In the resolution, Santiago added that there was a need to modernize the country’s weather forecasting system. “The equipment of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa) captures data too late and is limited to wind warning; there is no flood warning or landslide warning to activate evacuation,” Santiago said in her resolution.

With late warnings, the local government units were not able to issue official advisories and evacuation orders prior to the onset of the massive floods.

Senators also noted typhoon Ondoy brought the biggest floods to the country. “It had a magnitude double that of Hurricane Katrina in terms of total amount of rainfall,” Santiago said.

Senate Minority Leader Aquilino Pimentel Jr. said officials should be liable for opening dams without warning. Reports said the release of water from Angat and Ipo dams resulted in the massive floods in Metro Manila.

Pimentel, who lives in Marikina City, said his house in SSS Village was “muddied all over,” adding that the cleanup may take weeks.

“Papers, pieces of furniture, equipment and other appliances were damaged. Officials should be liable for opening the dams without warning,” Pimentel said in a text message.

Supplemental budget

During the session yesterday, Sen. Edgardo Angara said the Senate will look into Santiago’s measures with utmost speed but he noted that it will not be that easy for the Department of Budget and Management (DBM) to release funds. Angara likened this to “extracting a tooth from the DBM.”

Angara said it was better if the Senate supports the passage of a supplemental budget to allow the immediate disbursement of funds.

Angara said he is coordinating with his counterpart at the House of Representatives as well as officials of the Department of Public Works and Highways (DPWH) to expedite the report on the extent of damage on infrastructure in Metro Manila and affected areas.

Enrile announced yesterday that the Senate would donate a total of P1.5 million to the victims of Ondoy through the ABS-CBN Foundation Inc., GMA Kapuso Foundation, and the Philippine National Red Cross.

Enrile directed Senate Secretary Emma Reyes to donate P500,000 each from his discretionary funds to the three organizations to support their ongoing efforts to provide relief assistance for the typhoon victims. The Senate welfare fund amounting to P120,000 will also be divided among the three organizations.  

Chief News Editor: Sol Jose Vanzi

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