PRIVILEGE SPEECH

Councilor Victorio U. Advincula, Jr. City Councilor, 3rd District 16th City Council of Davao City

Mr. President, members of this honored City Council, visitors, ladies and gentlemen, good afternoon. The Government, being an organization consisting of the actions of public officials in making and implementing decisions, is tasked under our Constitution and our pertinent laws and regulations to basically provide policy measures to render public services for the welfare and interests of its sovereign people that is, sustainable services pertaining to food, shelter, health, education, environment, telecommunication, roads and infrastructures, public safety, peace and order and the like. To be able to do so, the government thus enters into contracts with private sectors for the reason that these private sectors had been recognized as partners of the Government for national growth and development. Hence, Republic Act No. 7718, an Act amending certain sections of R.A. 6957, entitled An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector had been put in to law. And in relation to this, the 16th City Council of Davao is at present deliberates on the enactment of Davao City Public-Private Partnerships (PPP) Ordinance. However, glaring at Sec. 9 of R. A. 7718 on contract termination, it states therewith that in the event that a project is revoked, canceled or terminated by

the Government through no fault of the project proponent or by mutual agreement, the Government shall compensate the said project proponent for its actual expenses incurred in the project plus a reasonable rate of return thereon not exceeding that stated in the contract as of the date of such revocation, cancellation or termination. My friends, something is not acceptable with this
provision. The phrase by mutual agreement does not seem to fit in this provision because it is clear from the abovementioned provision that upon revocation of the contract, the Government shall pay a corresponding compensation to the private sector that financed the government project. In this pretense, why would the Government recompense a revoked project if in fact the Government and the project proponent mutually agreed to revoke the contract in the first place? To my mind, what should have been incorporated in this provision is the term by rescission and not by mutual agreement because if the Government and the project proponent, as contracting parties, due to some reasons or for convenience, mutually agree to revoke, cancel or terminate their contract, then they also mutually release themselves from their previous commitments or prestations. Suffice it to state that if the Government and the project proponent mutually agreed to revoke or terminate the project, no compensation whatsoever must be given to the concerned project proponent, as this is unjust and prejudicial on the part of the Government to pay for something that has not been entirely fulfilled due to mere mutual agreement. Article 1191 of the Civil Code states that the power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The power to rescind under the aforementioned

Article means the right to cancel or resolve the contract or reciprocal obligations in case of non-fulfillment on the part of one of the contracting parties. If we amend the phrase by mutual agreement to by rescission then we are able to correct this sham provision. By providing the accurate term for this provision, it justifies the succeeding phrase the Government shall compensate the said

project proponent for its actual expenses incurred in the project plus a reasonable rate of return thereon. I believe that more than correcting the said
provision the amendment will also expunge doubt as to the real motives behind the integration of this provision.

As policy-makers, we are supposed to be making laws for the benefit of our constituents, and not by acquiescing to string-pulling or crafting so-called favors to others, and making private businesses get wealthier given that this is a clear violation of our sworn duties in office, and of our Constitution. As legislators, we are not put into office to enact laws that are wholly unacceptable. Apparently, this provision of the law on contract termination was incorporated to benefit no more than the private sector. Hence, supplementary guidelines that aims to promote fairness in contract termination must be further included in this provision so as to protect also the interest of our Government. With the foregoing, as Chair of the Committee on Social Services, I am hereby urging our Representatives in the House, especially Rep. Isidro T. Ungab of the 3rd Congressional District, to revisit and to amend further this Republic Act for the interest of justice, and of the sovereign people. Thank you, Mr. President.

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