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UCLA Pacific Basin Law Journal

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The Presidential Veil of Administrative Authority over Foreign-Financed Public Contracts in the Philippines


Over the past decade, incumbent Philippine President Gloria Macapagal-Arroyo has been besieged by accusations of corruption, bribery, and influence-peddling in the approval and allocation of foreign-financed public contracts. The latest scandal directly implicating the President involved a proposed National Broadband Network (NBN) to be undertaken by a Chinese contractor, ZTE Corporation, under a foreign loan financing agreement with the Chinese government. During Senate investigations of the NBN contracts, then-Secretary of the National Economic Development Authority (NEDA) Romulo L. Neri disclosed that he was offered a 200 million Philippine peso (Php) bribe to favorably endorse the contract. A subsequent NEDA whistleblower was later abducted by government authorities, apparently to prevent him from testifying on multimillion dollar kickbacks demanded for the NBN project, and how NEDA had been reduced to a rubber-stamp in the evaluation and approval process. On the heels of public riots, impeachment threats, and the near-toppling of the Arroyo government, the President declared the cancellation of the NBN contract in October 2007.

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