1. On PPPs

    In theory I support the PPPs. Public-private-partnerships can be a relatively easy way, with reason, to redevelop a country’s faltering infrastructure. However, as with previous moves on the side of the Philippine government to partner with private entities, there are serious areas of concern developing.

    On a national level there is no doubt that the Philippines is seriously deficient when it comes to infrastructure development; Manila and other major urban areas are by far the most developed. Yet, there seems to be a sort of Manila-esque and Luzon bias brewing when it comes to the early projects: LRT 1, MRT-3, North Luzon Expressway, South Luzon Expressway and NAIA. More than likely this is a by-product of the lack of focus on development projects in other parts of the country for years. These are the five projects most ready for bidding. However, for a presidency that continually pledges that development and governance are their focus, you would have hoped they would have thrown in one or two projects outside of Luzon, for appearances sake of course.

    Beyond the type of projects initially being offered, the Aquino administrations penchant for picking up where the GMA administration left on in terms of ties with the business community is far more disconcerting. On his first mission to the United States the roll call of businessmen who traveled with Aquino was far from diverse: Cojuangco, del Rosario, Zobel de Ayala, Pangilinan, Antonio, Cuisia, Chua, Go, Aboitiz and Razon (those good old oligarchs from the GMA admin) and so on.

    This is a list of names that is far from diverse and has stayed fairly static since the fall of Marcos.

    I am not adverse to playing ball with the big companies in the Philippines, what I do find very worrisome is that these are the companies again being given preferential treatment when it comes public-private-partnership projects. One of the major obstacles for growing the Philippines economy is the inability for start-ups to expand beyond a certain level. Infrastructure and utilities are the playing ground of the conglomerates (witness what Danding and San Miguel just pulled off and Pangilinan continues to do); meaning that our economic structure is very top heavy, further making it difficult for actual reforms in corporate governance and oversight to be pushed through.

    On an additional level, one of the major structural inefficiencies in the Philippines is the wide gap in asset allocations. Massive amounts of assets, in the form of land and corporations, are controlled by a select few in the Philippines. By failing to open up bidding to alternate groups and PPP solutions (such as publicly owned but privately managed) and almost exclusively focusing on developing partnerships with a select few businesses will only further widen the asset gap and embed inequalities.

    As I said, I agree with the concept of PPPs. But I am wary of the execution and the type of private accommodations that are being made with the major business groups in the country. Why, news just came down that Ayala is seeking to reinvest in the MRT-3. Funny, they’ve been out of the infrastructure business for a while. I am not anti-business by any means, but with the history of the government in supporting certain business groups I find the trends in the Aquino administration worrisome.

    Open and transparent bidding that supports new competitors into the PPP game is a must. If the government does not do this, and focuses instead on wooing and working with a select few our economy will remain top-heavy and overall…stagnant.