It’s over – Bt corn wins

It was no doubt a knockout win by our women scientists.

The Bureau of Plant Industry recently approved the commercial utilization in the country of the high-yielding genetically modified corn variety known as Bt corn. This variety is highly resistant to the Asian corn borer which is responsible largely for damages being suffered by Filipino corn farmers. This means that farmers no longer have to spend so much for chemical insecticide application just to get rid of this pest.

The approval, which was made upon the recommendation of the very stringent National Committee on Biosafety in the Philippines (NCBP), came amidst a barrage of anti-biotechnology campaigns led primarily by Greenpeace which interestingly is funded by Europeans who have an axe to grind against the Americans who have fully supported biotechnology.

It was a blessing to this country that we have women scientists who refused to be bullied by the reported multimillion dollar funding that Greenpeace has for this anti-biotechnology campaign. These scientists did us proud in this controversy as they stood their ground amidst the high-profile and well-funded PR campaign run by enemies of biotechnology.

These women scientists urged the government then to go ahead and let our farmers choose between traditional and Bt corn. They said the GM variety poses no risk that is higher than what is already there in traditional varieties. The knockout punch came when the women savants challenged Greenpeace to back up its claim with scientific data. Apparently, their adversary’s heavy PR war chest did not include scientific facts.

So the fight is finally over, it was science winning over fear. Bt corn is now available to our farmers, thanks to the NCBP, BPI director Blo Umpar Adiong, and the other men and women in the Department of Agriculture, the academe, and the scientific community who similarly refused to be cowered.

Let us now pay salute to these women scientists who carried the torch – professors Nelle Lopez of the UP Diliman Institute of Biology, Emerica Cao of the UP Diliman Natural Science Research Institute, Nina Barzaga of the UP Manila InstiTute of Molecular Biology and Biotechnology, Dr. Violeta Villegas of the UP Los Baños Institute of Plant Breeding, and Dr. Evelyn Mendoza also of UP Los Baños.

There were of course male scientists who stood alongside our women savants on this debate. Our farmers salute them too.

The lure of government guarantee

In any project that investors want to participate in, all they want is to be assured that foreign they get fair returns. Understandably so because not only is it difficult to raise their own funds, but getting support from lenders is likewise an extremely excruciating exercise.

With the global financial crisis, foreign banks have restricted the access of borrowers to their loanable funds. And with the country doing away with giving sovereign guarantee, it will now be next to impossible to lure foreign investors in. The Philippines did right in stopping the practice of guaranteeing loans of both local and foreign investors. We have had some bad experiences before in which the government was forced to pay for investments gone bad. But it is now time for our economic and financial gurus to think of ways to include foreign funds without the government having to guarantee business failures.

Former President Estrada’s statement hat he did not approve the CBK Power deal because it was asking him for a sovereign guarantee obviously could win him points. But from where I sit, this is pure political hogwash. Government documents on the power deal say otherwise: IMPSA, the proponent of the power deal, was not asking and did not get a sovereign guarantee. Documents show that IMPSA had consistently sought for an "indirect government guarantee" which simply meant that the government will see to it that the National Power Corp. pays it for services delivered.

Estrada even gave former Finance Secretary Edgardo Espiritu the "full power of authority" to sign the so-called performance undertaking (PU) which embodies the indirect government guarantee that IMPSA was seeking. The PU was never meant to guarantee IMPSA’s loan. It is very clear that the government need not pay IMPSA’s creditors if the project fails.

It was, therefore, grossly unfair for IMPSA to be vilified in the press. In fact, it is wonder of wonders how the Argentinean company was able to convince its 18 international lenders to participate in the project without getting full government sovereign guarantee. Maybe our financial geniuses can learn a thing or two from this exercise.

Another document that the Estrada government executed in favor of IMPSA was the so-called GACA or the government accessions and consent agreement which was signed by former Finance Secretary Jose T. Pardo. According to Estrada, the reason why he held off approval to the power deal was that Pardo did not want to grant IMPSA the full government sovereign guarantee. Wrong again. The issue of guarantee has been settled during Espiritu’s time as finance secretary. What Estrada authorized Pardo to sign, again through "full power of authority," was the GACA. The GACA sounds Greek to us but this is a simple document which gives the project’s lenders the authority to monitor the payments Napocor is giving to CBK Power.

Through the GACA, CBK Power’s lenders led by Citibank will know whether CBK Power is really using the money for the project.

In short, the specific purpose of the GACA in the CBK project was: that by virtue of the accession undertaking the private party is not IMPSA alone as in the original proposal, but the Filipino CBK Company Ltd. composed of IMPSA and Edison Mission Energy; that CBK transfers and assigns several of its own rights to the lenders; that the lenders now take certain rights that originally belonged to CBK; and that in event of privatization, the successor entity shall carry the rights and obligations of the Government.

To clear the confusion created by a vested interest group that the PU was a "full sovereign guarantee" the GACA made explicit the nature of the PU by saying in the last paragraph the following: "For the avoidance of doubt, it is understood that nothing in this letter agreement shall be construed so as to convert the Government Undertaking to a direct guarantee by the Government of the obligations of CBK to the lenders under the Omnibus Agreement. Neither shall this letter agreement construed to increase or expand the obligations of the Republic of the Philippines under the Government Undertaking dated July 12, 1999."

The ongoing Senate investigation on the power deal, thus, is much ado over nothing.