Gov't to resume phone program

Government will pick up the slack left by the private sector in the defunct Municipal Telephone Development Program (MTDP) when the National Economic and Development Authority (NEDA) completes the review of the individual contracts already signed with private companies.

Struggling with a tight P62-billion budget deficit target, the Economic Coordinating Council (ECC) had junked the program, but the Economic Mobilization Group (EMG) said the contracts that government has already signed with private companies would still be evaluated by NEDA.

The EMG is a multi-sectoral coordinating body created as a quick-response team to address economic issues and policies. It is headed by the Department of Trade and Industry, with representatives from powerful business councils. Trade and Industry Undersecretary Ernesto M. Ordoñez told reporters that although the EMG had elevated the decision to the ECC, the group "never intended for the Cabinet to totally junk the whole thing."

Ordoñez said there are areas that have not been reached by the roll-out program of existing telecommunication firms under the government's liberalization program which came after the MTDP was first implemented by the Department of Transportation and Communication.

Although the MTDP is exempt from the NEDA review required of all projects worth over P300 million, Ordoñez said the EMG opted to subject the project to the agency for a more thorough review.

According to Ordoñez, the NEDA had been asked to conduct the evaluation to determine the financial rate of return and the economic rate of return of each project.

"Where the FRR is low but the ERR is high, private companies might not want to undertake the project and this is where government will come in," Ordoñez said. The EMG's proposal for government to assume low-FRR but high-ERR MTDP projects, however, did not agree with the ECC which decided to junk the program altogether to allow the government to remove P53 billion from its contingent funding requirement.

Taking over specific projects would mean government expenditure on barangay level telephony that the Estrada Administration is not likely to be able to afford. This early, it has been sending feelers that it is not likely to meet its P62-billion programmed budget deficit, especially since the target was based on an assumption that it would be able to raise P22 billion from the sale of some of its assets. --