‘Plunder’ at Poro Point

When doing business in the Philippines, the further you are from the center of Metro Manila, the greater your chances of being harassed by powerful local politicians. And this could very well be the case with the recent drama involving several government agencies and Bulk Handlers Inc., a private business entity that has been running the Poro Point port and bulk terminal operations for seven years now.

What seemingly started as a complaint by a "well-meaning" political patriarch of Ilocos Sur has escalated to date into an ugly scene — complete with reports of physical violence — that has enmeshed both local and National Government entities.

The first visible signs of trouble manifested itself when Gov. Luis "Chavit" Singson was heard agitating in the halls of Congress to void the contract signed between the Bases Conversion Development Authority/John Hay-Poro Point Development Corp. and BHI in 1999 to manage the seaport and develop the former American base as an industrial park.

Calling the agreement as a "sweetheart deal" grossly disadvantageous to the country because BHI would only pay the government an annual lease of P50 million for the next 25 years whereas it was already earning P50 million a month, Chavit clamored for an investigation. Just recently, apparently in a bid to apply more pressure, he filed a plunder case against almost everyone associated with the case.

Patriotism and plunder

Sounds familiar? Strange, but patriotism indeed can be as life-threatening and lethal for a country equal to such crimes as espionage and plunder. How many of our "nationalists" have questioned contracts drawn up by government agencies, and in the process wrecked the Philippines’ chance of boosting its infrastructure and consequently its economic standing?

Remember the Bataan Nuclear Power Plant that we are still paying up till now, and now forms a big part of our debt burden? Remember the pull-out of that investor which was willing to put up the capital to build a downstream polyethylene plant? They wanted to locate their plant in Batangas but someone thought that Bataan was a better place.

Had the case against the "infamous" IPPs prospered a few years ago, those power generating firms that invested billions of dollars in the country would just have pulled the plug and walked away to leave us cope with daily outages again.

The controversy hogging the construction of the Ninoy International Airport Terminal 3 and its project contractor, the Philippine International Air Terminals Co. (PIATCO), is another case that continues to cripple the country’s program to bring its airports to world standard.

What is happening at Poro Point is becoming another warning signal for potential investors on the dangers of doing business in the Philippines. Anyone who has seen the potential of a strong gateway north of Metro Manila and the Philippines as an access to some 87 million potential consumers is now forewarned of the whimsical caprices of local politicians.

Changing rules in midstream

Clearly in BHI’s case, no one had complained during its first few years when the company was not earning enough, or even losing money. The fact that BHI has religiously remitted its annual P50-million lease obligation whether it was in the red or in the black apparently demonstrates its commitment to a contractual obligation.

If, as Chavit insinuates, there is a lopsidedness of its 25-year contract, government must chalk it down as a lesson that must be avoided when drawing out future management agreements covering seaports. Changing the rules in midstream, or worse, abrogating a contract because of perceived onerous provisions just sends very wrong signals to existing and potential investors.

Besides, when the contract was signed seven years ago, no one was sure whether the government would have delivered on its grand plans, one of them being the construction of the Northern Luzon Railway to link Poro Point to an ambitious multimodal transport system.

Businessmen are complaining that the cost of doing business in the Philippines is way too high. Obviously, it is because they have factored in the risk element of a meddling political and judicial system, plus the malleability of a national leadership to popular opinion, even if this is by a noisy minority.

Being above board

Of course, it helps if business would always keep its nose clean. Findings about irregularities or even actions of neglect are simply wonderful opportunities for powerful individuals or groups in Philippine politics that have otherwise vested interests.

In the case of BHI, it may have cleared itself of initial findings concerning some environmental infractions. But it has not adequately answered the fact that it has been operating for seven years without an Environmental Compliance Certificate.

The local representative of the Department of Environment and Natural Resources may have been patiently waiting for BHI to submit its mandatory ECC documentation; but when external parties enter the picture, especially if they peddle influence, the formerly relaxed rulings have to be strictly followed and upheld.

The worse thing that can happen to an investor doing business in the Philippines is to be naïve about the importance of recognizing local sensitivities. This does not only refer to politics and politicians, but also the sentiment of local communities, the Church including.

BHI may seem to be holding well in the battle of the courts against BCDA. On the strength of a temporary restraining order, the court has upheld BHI’s ascendancy in operating the seaport.

Because the local DENR office has ordered a cease-and-desist directive for BHI’s lack of an ECC, there is some confusion as to who will manage the port operations. Meanwhile, there is a stalemate in the operations of Poro Point’s sea terminal and container operations. Definitely, the paralysis is not doing anyone any good.

Poker tour at Masskara festivities

Philippine Poker Tour (PPT) started during the weekend the Visayas and Mindanao phase of the Million-Peso Hold’em Philippine Championship with the Bacolod Hold’em Challenge held at the Casino Filipino Hotel, Bacolod City.

Casino Filipino Bacolod Branch Manager Mike Bailey, together with CSM Eduardo M. Chim and CSM Dionisio C. Chua were on hand to greet the local as well as the out-of-towner poker tournament players that joined the PPT qualifying tournament. While the festivities were at full blast in the streets of the City of Bacolod, the well-trained poker dealers and technical staff of CF Bacolod were busy ensuring that there would be no hitches while poker enthusiasts outdid each other to win a seat to the Grand Finals to be held on 16th and 17th December 2006 at CF Pavilion, Manila.

After almost six hours of intense struggle over the green felt tables, new convert Hold’em poker player Kirk Lanzar led four other qualifiers to the PPT Million-Peso Hold’em Philippine Championship, the biggest non-wager tournament to date. Raymond Ong, Jun Caberoy, Cris Hillana and Rudy Felicitas joins Lanzar to the grand finals in Manila.

PPT continues its tour in Visayas and Mindanao with the next satellite tournament on Saturday, Oct. 28, at CF Cebu-Lahug, Waterfront Hotel, to be followed on 11 November at CF Cebu-Mactan, and on 25th November at CF Davao, Davao City. These satellite tournaments will give local players the opportunity to earn seats to the December grand finals.

Details about the venues and schedules of other qualifying/satellite tournaments are posted in the Philippine Poker Tour (PPT) official web site at www.PhilippinePokerTour.com. Those interested to join these satellite/qualifying tournaments and win seats to the Grand Finals on 16th to 17th December 2006 may also call the PPT secretariat (c/o Cindy) at 817-9092 or 812-0153.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at reydgamboa@yahoo.com or at reygamboa@linkedge.biz. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.