Napocor sale seen to send positive signal to investors

The National Government should pursue the privatization of the National Power Corp. (Napocor) assets to project a positive signal to prospective investors in the country’s power sector, a ranking US official said.

"With respect to the Philippines, everyday we read some bad news and bad reports on the investment climate here, and I’m talking about politics. And certainly there are many ways that the Philippines can improve on its investment climate. One of the areas the American government is looking forward here is the privatization program," United States Agency for International Development (USAID) mission director Jon Lindborg told reporters over the weekend.

Lindborg has committed to support the government on this effort. "It’s something we support in terms of policy agenda and system in providing partnerships with the Department of Energy (DOE)," he said.

The USAID official said as much as possible, the government should not allow political issues to get in the way of the improvement of the investment climate in the Philippines.

"In the end, that decision has to be made by the Philippine government. And it has to move forward using those systems in terms of how that will work in terms of political process. Many privatization transactions are also apolitical transactions too, because in an open society the democracy will have to balance various interests of all these people," he said.

But Lindborg pointed out the need for the government to maintain investors’ confidence by making the existing policy framework work.

"In terms of our policy, we certainly support and approve of an investment climate that honors the sanctity of contracts where the contracts that I sign five years ago will be the same contract that I can honor five years next, and they need to make their decision based on those kinds of contracts," he said.

With this, Lindborg said the US government remains committed to promoting the Philippines as an investment haven for US investors.

"We certainly want to see more US investments in the Philippines and do all that we can, as a government partner, to make the environment here better for investment," he said.

Other agencies like the International Monetary Fund (IMF) and the World Bank have expressed concern on the continuing delay in the privatization of the transmission and generation assets of Napocor.

In its latest assessment, the IMF executive board said "power sector privatization is essential to restore the financial viability of the sector and to facilitate the investments needed to ensure adequate power supply."

The IMF also expressed concern about the delays in the bidding process for the transmission assets, and urged the authorities to finalize the agreements holding up the privatization of the generation assets.