Part of the exuberance that greeted our new President is the expectation that good things will start to happen soon. For a while those expectations were supported by the President and his economic team saying the right things. But after over half a year in command of the country and its bureaucracy, we seem to be going nowhere fast.
Indeed, fears are now being expressed that P-Noy himself is so laidback and so lacking in proper work habits to set the example and inspire the government machinery to move with a renewed sense of purpose and urgency. Even the business community, which constituted one of his staunchest supporters, is getting a bit more impatient about the pace of reforms. The reservoir of positive sentiment is running out in the absence of more developments by way of changes that would improve the business climate on the ground and beyond mere speeches, Power Point presentations and press releases.
P-Noy cannot claim comfort in his still high approval rating. As local market guru John Mangun observed: “While the President still commands a very favorable ‘approval/trust’ rating, maybe there is a growing lack of confidence for the future. So growing a sense of caution or hesitation in the President could be reflected in our stock exchange. The next weeks of trading activity will be very interesting as we get nearer to 3,600 on the index.”
The first signs of trouble can be seen in this administration’s centerpiece program for the economy: the PPP. It has apparently hit predictable roadblocks. According to a headline story of BusinessWorld, our economic managers have admitted delays in the PPP projects for this year. They are targeting 10 projects but unless they are able to iron out such things as how to compensate investors for change of rules and how to get LGUs to be more business friendly, they will be lucky to launch any major project this year.
According to the BusinessWorld story, officials told them that they are pushing back bidding for several PPP projects because of unfinished studies and rules governing the centerpiece infrastructure program. Foreign business groups and diplomats were also told that the framework to implement promised guarantees remained incomplete. In other words, they didn’t do their homework before they launched with a big bang.
As it happened, Business Mirror reports that the Foreign Chambers of Commerce raised the need to come up with clear protection from regulatory, legislative and judicial risks for long-term investors, as well as immediately resolve previous build-operate-transfer (BOT) projects that went wrong. Unless this happens, the Foreign Chambers warned that the administration will not be able to persuade the international investment community to participate in the administration’s public-private partnership (PPP) projects.
Possible rules to guard against regulatory risks “are now subject to discussion at the National and Economic Development Authority’s infrastructure committee... and details will be provided in due time,” PPP Center Executive Director Philamer Torio told BusinessWorld. In other words, the issue has not moved from the day P-Noy promised it during the PPP launch. If the executive branch has not finalized those rules, how can Congress even start to discuss possible needed legislation?
These problems should have been anticipated when P-Noy promised the guarantees. In fact, even as the business sector welcomed the President’s guarantee, they wondered how it would be implemented. It would most likely require legislation since money will have to be appropriated for the purpose.
But now that it had been promised, the government must make good on it or lose credibility. P-Noy should use his current positive influence on members of Congress to help him out here. P-Noy should convene a LEDAC meeting to take this matter up. He should emphasize the urgency of crafting and passing appropriate legislation or the implementation of any PPP project this year may be wishful thinking.
One route being explored to prevent arbitrary contract changes is to limit the involvement of local government units (LGUs), according to Board of Investments managing head Cristino Panlilio. They are looking at proposing amendments to the Local Government Code to “unravel the authority of LGUs which are subject to abuse”, Mr. Panlilio said. Such a proposal is likely to attract much opposition in Congress.
According to a report filed by PhilStar reporter Ted Torres, IFC Resident Representative Jesse Ang said the Aquino government must make the program attractive to both domestic and foreign investors. “The government must do things right, and must create the impression that the Philippine is sincere, and that it will end the virtual cycle of corruption or inefficiency.”
The same IFC official while supportive of the program that will invest on much needed public infrastructure, has also expressed the view that “the problem with PPP is the pipeline is not robust.” This is also the view taken by the Foreign Chambers: “We strongly recommend that a pipeline of bankable PPP projects be developed.”
P-Noy was right to make PPPs a priority program because we do need to bridge the country’s infrastructure gaps amid a chronic lack in government funds. But this is not a new program. It is a rehash of the old B-O-T or Build-Operate-Transfer programs of the past. It is unclear how the Aquino Administration will introduce enough changes in it to mitigate the bad experience of the private sector in the B-O-T program in the past.
It seems to me our officials should realize selling the program does not just mean making glitzy presentations to prospective investors. Convincing members of Congress and LGU officials to help should be top priority at this stage.
One thing is sure… time is ticking fast and before we realize it, the year is over and unless P-Noy moves with more urgency in getting the homework done to make PPP viable, he will have nothing to show by way of accomplishment this yearend.
Mining ban
P-Noy did the right thing with his mining ban. It is about time that government through the DENR take stock of all the mining applications they have accumulated through the years. Corruption at the DENR has become a problem because of these claims. Many of those are claims made by people close to politicians who do not have the means to follow through.
It is unfortunate that mining in the Philippines has had such a bad history that was highlighted by the Marcopper disaster in Marinduque. If it was just a backyard mining venture, it would have been understandable. But Placer Dome which owned Marcopper was supposed to be one of the big and responsible ones. It was a supposedly respectable Canadian company (one of the largest gold mining companies in the world) listed in the Toronto Stock Exchange.
I once had the opportunity to visit Marcopper mines many years ago. I saw the large earth mover trucks and was given a tour of all the interesting facilities on site. It seemed state of the art then, with a modern medical facility, a school and if I remember right, their power plant provided electricity to the rest of the island.
I could not believe it when that ecological disaster from the mine tailings happened. I would have thought that the company was responsible enough to make sure such a thing would not happen. After that disaster, it is difficult to convince people that there is such a thing as responsible mining.
Then again, the mining ban may be good in the sense that we are preserving some resources for future generations. We have used up our forests, dirtied our lakes, rivers and streams, polluted our air. Given that we have used up everything else God gave us that are easy to exploit, it is just as well that we leave something of value to our grandchildren.
Next time we resume mining in this country, let us make sure that the activity will benefit our people and preserve our environment. After Marcopper, I have become skeptical of any protestations of responsible mining… yes, even from the largest of mining companies… I am also yet to be convinced we have the ability to properly regulate them.
Get the suspect
This is from The Professional Heckler.
According to reports, former AFP Chief of Staff Angelo Reyes died from a self-inflicted wound to the chest.
When Reyes’ boss, former president Joseph Estrada heard this, he said, “Sana mahuli agad ang suspek.”
Boo Chanco’s e-mail address is bchanco@gmail.com