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26/09

President Aquino woos European investors with public-private partnership projects

One of the highlights of Philippine President Benigno Aquino's European tour was the Public-Private Partnership Conference held in Brussel where he trumpeted his administration's PPP gains. This was aimed at attracting greater trade relations and investment deals with European investors. But back at home, Filipinos are bearing the brunt of the adverse effects of public-private partnership projects in infrastructure, public utilities and social services.

One of the highlights of President Aquino's official European tour was the Conference on Public-Private Partnership (PPP) Program for Infrastructure Projects in the Philippines in Brussels. Speaking before European investors, the president trumpeted PPP gains under his administration involving 8 projects worth $1.3 billion (Euro 1.01B).

The conference was jointly organized by Philippines's Public Private Partnership Center and the Association of European Chambers of Commerce and Industry in a bid to expand Philippine trade relations and secure investment deals with European investors. Following President Aquino's speech, the Philippine PPP agency presented to the investors a pipeline of over 50 PPP projects estimated at about $20 billion or Euro 14 billion.

PPP is said to be the centerpiece of Aquino's economic program to attract private investors in infrastructure development as a way to solve the persistent problem of government budget deficit in delivering social and public utilities services. Besides infrastructure development, PPP also includes opening up of social services, like health, to private investment. The current PPP in health involves rehabilitation of existing hospital facilities, corporatization of public hospitals, upgrading of medical facilities to cater to medical tourism and even leasing of land assets of public hospitals for commercial purposes.

TWHA Philippine partners are part of a social movement that is actively opposing PPP which is essentially a sanitized term for privatization. The Aquino administration is adamant in pushing for PPP although previous and current experiences with privatization have shown that it has only benefited a few corporations at the expense of the majority, especially the poor (more than a quarter of population in the country is living below the poverty line).

The Aquino administration strongly believes that attracting private investments in infrastructure development and delivery of social services will spur economic development. But can profit and public service go hand in hand? In the Philippines, where a few elite families overlord the economic and political institutions while the government allows transnational corporations exploit the country's resources, privatization has just become another milking cow of the oligarchy and foreign investors.

The privatization of power sector, water supply, tollways and rail system has resulted in problems like exorbitant prices and inefficient services being borne by the public; corporatization and commercialization of health sector have paved the way for user-fees being charged by public hospitals resulting in the displacement of indigent patients. Indigent patients who cannot afford to pay user-fees have been denied access to medical services. The number of rooms and beds allocated for indigent patients has dramatically been reduced to give way to pay and private rooms. Various health groups have mounted legal actions and protests against the privatization of the Philippine Orthopedic Center, the country's lone hospital especializing in orthopedic disorders. Under the winning bid, the hospital is allowed to reduce beds allocated for indigent patients from current 562 beds to 70 to prioritize paying patients. Employees also face the possibility of losing their jobs due to retrenchment.

The looming energy crisis due to massive power shortages has been attributed to the Energy Power Industry Reform Act (EPIRA) which mandates the privatization of the power sector. The promised cheaper and efficient electricity through competition has resulted in monopolistic control of a few corporations which have blatantly jacked up electricity rates amid power crisis making electricy rate in the Philippines one of the highest, if not the highest, in Asia. Instead of repealing EPIRA, the President now wants emergency powers to tackle the power crisis because under said law, government is not allowed to build power plants leaving the development of power generation to the hands of private corporations.

The privatization of water supply and tollways in Metro Manila has also led to rate increases for the past several years. The riding public has to endure daily agonies of long queues, recurrent glitches and service disruptions as the privatized metro rail transit system has deteriorated so massively that the government seems not to know what to do to solve the crisis.

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President Aquino woos European investors with public-private partnership projects | Viva Salud

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