SHANGHAI — Rumor has it that two cabinet secretaries of the Aquino administration were here in Shanghai last Monday and after a lukewarm event have now flown off to other destinations.
According to a local source Credit Suisse and UBS hosted Finance Secretary Cesar Purisima and Trade Secretary Gregory Domingo, in order to familiarize potential investors about PPP or Public-Private-Partnership.
From all indications I am told that the Purisima-Domingo presentation went well although it was Credit Suisse and UBS that seemed to benefit from the affair because it simply reinforced the image of the companies as “globally influential” bankers and investors with political clout.
As I spoke with my source it became clear that such “Road Trips” or junkets, will most likely head towards nowhere for a number of reasons.
While the PPP concept that is being drummed up by no less than President Noynoy Aquino himself is both novel and noble, it is something that applies or works only for Filipinos and not foreigners.
While the President sends out teams to attract foreigner investors, no one has paid attention to the biggest stumbling blocks or disadvantage that has perpetually made the Philippines unfavorable to foreigners.
Unless we fix the “anti-foreigner” and protectionist provisions reflected in our various constitutions, we should just forget about getting all the foreign investors we need and want.
The second problem that needs to be fixed has to do with the definition and impressions concerning Public Private Partnership.
When PNoy and his boys first talked about PPP, the impression was that PPP would cut away with the red tape and the corrupted process of government biddings through simplified partnership between the state and the investor.
The impression was that PPP would create partnerships based on the strength and competency of a company and match these with the dormant resources and plans of government. Since the PPP would be a true “partnership”, the investors are less likely to tolerate corruption within their own project.
Instead of the government calling out public biddings for certain projects, the PPP program would allow investors to propose unsolicited projects or partnerships that may not be in the government program but beneficial to development.
But from the looks of it, “after all was said and done, there was more said than done” because after you make your proposal, the law states that there must be a public bidding or a challenge. Investors don’t see any logic in taking part in a public bidding for a project that was their idea in the first place!
PNoy and his playmates in Congress would first have to fix current laws or override them with new laws that can bypass current legal requirements. Otherwise, we will just have a new collar for the same old dog.
Speaking of reform, the third problem is about “separating the men from the boys”.
Through the years, major investors, large multinational companies and global businessmen have expressed interest in the Philippines. Some have even attempted to start up operations in the country. However, government has constantly kept a “local” mentality.
What happens then is that the local boys get the franchise, the contract or the concession but can’t fast track the projects because of limited funding.
Any government development project under the Bases Conversion Development Authority should earmark or set aside portions of future projects for foreign investors and not just the same old “Boys Club” of Taipans and Typhoons.
A business executive here in Shanghai told us the story of how they visited the Philippines with one of the biggest property developers in Shanghai. Upon reaching Metro Manila, the business tycoon was briefed on the BCDA projects such as The Fort, Clark, etc.
But when the property developer showed interest, he learned that he would have to partner with members of the Boy’s Club. The gentleman from Shanghai was quoted as saying: “I’m bigger than them, why do I have to partner with them if I don’t need partners?”
Why indeed would someone invest a lot of money but have no say in it.
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Instead of chasing their tale just like other administrations and Presidents have done, perhaps President Noynoy can be more significant as the leader who first prepared the house before inviting the guests.
Like any business, the administration must first decide who their intended market is for the PPP and exactly how the pie is to be cut or subdivided in terms of local and foreign investors. What time frame or schedule are they operating on and how can they institutionalize the PPP program so it carries on beyond PNoy’s term.
On the short term, first do away with the unnecessary regimentation and regulations that would rob potential partners of their intellectual and technical “properties” such as Swiss challenge and public biddings. Simply put up a presidential review committee.
On the medium and long term, PNoy should muster the courage to rewrite the Constitution in order to rewrite our history, our economy and our destiny.