BS Aquino’s PPP: Plunder, Pillage, and Pig-Headedness in Broad Daylight

Expect the Aquino Administration to play up its PPP projects the 2012 SONA. The Philippine alligators este.. legislators will be flashing their “Honorable” titles – in a congress of the most dishonorable people in the country. And expect ignorant Filipinos to applaud the list of projects which which is a virtual list of plunderous activities being foisted on the Filipinos in broad daylight.

Philippines Private Public Partnerships: Economic Plunder in Broad Daylight

According to the DOF website

The Philippine Government is committed to a free market economy. There is, however, significant direct government involvement in the country’s economic activity through both economic planning and the state-ownership of numerous corporations involved in certain strategic sectors, such as banking, power-generation, oil production and transportation.

What’s wrong with this statement? The Philippines is “committed to a free market economy” BUT has not acted on the committment.

The Philippines and Filipinos liberally use the word “free market” but the Philippines has been described in the World Economic Freedom Index as “MOSTLY NOT FREE”. The country comparisons chart shows that free economies have an average score of 84.7 while the Philippines scored 57.1 – LOWER than the world average of 59.5, and still LOWER than the regional average of 57.5.

For short just because the government brochure says the Philippines is committed to a free market economy does not mean that the Philippines is a free market economy because the economic freedom score and index shows that the Philippines is “MOSTLY NOT FREE”.

The DOF website further states that

The PPP is a key strategy of the Philippine development plan. With the end view of fostering an environment conducive for private sector entrepreneurial initiatives, the government has developed a policy environment that strongly supports private sector participation in its development activities.

What’s wrong with this statement? The question is whether the government should continue undertaking its “development activities”. What are these activities?

Let’s look at the list of projects

1. LRT Line 1 South Extension and Operation & Maintenance
2. LRT Line 2 East Extension and Operation & Maintenance
3. Operation & Maintenance of the Laguindingan Airport
4. New Bohol (Panglao) Airport Development
5. Mactan-Cebu International Airport Passenger Terminal Building
6. Operation & Maintenance of Puerto Princesa Airport
7. Automatic Fare Collection System
8. Integrated Transport System (ITS) Project
9. Cebu Bus Rapid Transit Demonstration Project
10. NLEX-SLEX Connector Road
11. NAIA Expressway Project (Phase II)
12. CALA Expressway (Cavite and Laguna Side)
13. Improvement / Rehabilitation of the Quirino Highway
14. New Centennial Water Supply Source Project
15. Operation & Maintenance of Angat Hydro-Electric Power Plant
16. (AHEPP) Auxiliary Turbines 4 and 5
17. Balara Water Hub
18. Vaccine Self-Sufficiency Project (Phase II)
19. Modernization of the Philippine Orthopedic Center
20. Grains Central Project
21. Establishment of Cold Chain Systems Covering Strategic Areas in the Philippines

If you recall, these projects have been handed to BS Aquino’s pals on a silver platter. Why do I make that statement? For the following reasons:

1. Participation of foreign companies in public projects is limited to 25%.

2. Participation of foreign companies in Philippine registered businesses is limited to 40% and they are required to partner with Filipino nationalities who are mandated to retain 60% of the business.

3. Government is still in control of the program – and has just outsourced its “developmental activities” to vested interests. That’s institutionalizing the plunder. Fabian socialists would be so proud.

Passing on the Cost of Inefficiency

The implications of limiting participation in these projects to Filipino majority-owned companies are the following:

1. Inefficient Filipino companies pass on their costs to consumers.

2. Inefficient Filipino government agencies are not only a burden to tax payers – but also share in the revenue of the PPP operators – it’s double taxation on broad daylight as private operators pass on the tax burden to consumers – who have already paid for public services via taxation.

3. Consumers and taxpayers are deprived of savings from more efficient non-Filipino majority owned companies.

In short and simple terms – when all these PPP projects go online, expect costs to go up – SIGNIFICANTLY. Why? Because the PPP operators can get away with it – there’s no competition, no market signal.

Instead of improving processes, introducing innovation, cutting costs – it will be business as usual – the economy is “insulated” from the external shocks – we are quite happy with the internal shocks – joblessness, poverty, underemployment, hunger. Anyways, the OFWs will keep on sending remittances to their dependents – and that will keep the cash registers of Ayala, Cojuangco, Pangilinan, Lopez, Sy, Tan go kaching kaching.

The foreign partners who own only 25% of the equity will then be hyped as the influx of PPP investors. I feel sorry for these companies who will be used as show ponies to divert attention from the 75% equity owned by BS Aquino’s buddies.

I feel sorri-ER for every Filipino who will have to cough up their hard-earned money and pay exorbitant charges that will be divided between the PHL government and Aquino’s pals. This is daang matuwid all right- daang matuwid all the way to the bank – SALN not needed.

The Perpetual Bait and Switch

The DOF website goes further to state that

This policy environment has two fundamental cornerstones: First, economic structural adjustments have been geared towards opening the economy to competition and levelling the playing field of enterprise.

I don’t know what economic structural adjustments the DOF is talking about. “Gearing towards opening the economy” does not mean that the economy is already open. This so remindss me of the statement “poised for business”, “ready for take-off” – but still no business, and has still not taken off.

With the recent policy pronouncements of BS Aquino that he is against charter change belies the DOF statement because unless the charter is changed to remove the 60/40 constitutional restrictions – consumers will be in for more hard times. Vietnam has embarked on economic liberalization, Myanmar is now embarking on economic liberalization, even North Korea is on the cusp of embarking on economic liberalization. I’d say the Philippines is out to replace North Korea as “The Yellow Hermit Hacienda”

Second, a clear policy and institutional framework has been put in place to permit unencumbered flow of private resources into the government’s development program, especially for the infrastructure sector.

Translated into layman’s terms – government is siphoning private sector resources into government programs. This means – there are less resources available to the private sector as government ramps up spending. Is that a good thing?

Who’s gonna foot the bill?

Which means overall – the government will grow, its expenditures will grow, its revenue base will grow – except the businesses and taxpayers who had to shell out MORE MONEY and MORE TAXES so government can show this figures. Have consumers and taxpayers benefitted from these programs? Blinding flash of the obvious says… NO!

But no worries – Pinoys will remain PALAMUNIN, PULPOL, PIPI, and POBRE… PPPP.

Four more years of Aquino’s Plundering, Pillage, and Pigheadedness… PPP

About the Author

BongV has written 397 stories on this site.

BongV is the webmaster of Antipinoy.com.