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Private sector investments drive our development

"Shouting class-divisive threats is a dangerous tactic with self-inflicted consequences."

 

The current economic momentum will not be possible without a conducive socio-economic and stable regulatory environment that motivates the mobilization of big investments in private ventures, infrastructure development and delivery of public services. This is a requisite in achieving the goal of inclusive growth.

The dangerously divisive and damaging pronouncements against two enterprises who are acknowledged as leading investors, and you can say are big believers in the Philippine potential, are shaking the strong foundations needed to inspire global confidence. Competitiveness has been shaken to a level of uncertainty that puts to risk the Build, Build, Build or “golden age of infrastructure” ambitions of this administration.

The findings of a September 2019 study conducted by national pollster Pulse Asia commissioned by the Stratbase Group shows a contrasting and very positive appreciation of the impact of private sector investments on the delivery of public services, jobs and livelihood. The results reflect the sentiments of 1,200 respondents nationwide.

The study asked whether you agree or disagree that “Government should engage in partnership with qualified and reputable private enterprises to build and operate key development public utilities and infrastructure projects such as electricity, water, roads, and mass transportation.”

Seventy two percent (72%) or 7 out 10 respondents agree with the statement. Mindanao (the current administration’s bailiwick) scored the highest at 90%, Visayas at 78%, Luzon at 61% and the National Capital Region (NCR) at 66%. In terms of class demographic, D and E had 73% and 71% respectively and C at 66%. 24% gave a neutral response while only 4% disagreed.

The respondents were also asked on whether or not they “believe that private sector investments in infrastructure development and delivery of public services are helping to alleviate poverty by creating jobs and livelihood opportunities.” This is an issue that has been a consistent top concern of Filipinos for decades.

Seventy five percent (75%) said “YES” they believe that the private sector’s investments in infrastructure and public services had a positive impact on jobs, livelihood and lessening poverty. Again, it is Mindanao giving highest approval at 86%, Visayas at 76%, Luzon at 71%, and NCR at 67%. Class D scored at 78%, Class E at 68%, and Class C at 58%.

The positive findings of this study illustrate how Public Private Partnerships, when implemented properly, could succeed in delivering the intended benefits to the people. We experience this in our daily activities; it does not need much imagination to confirm.

A quick scan of operational PPP projects gives a macro perspective of the crucial contributions that the private sector investments have to millions of citizens nationwide. In transportation, top of mind are the North Luzon Expressway, Subic-Clark Expressway, Tarlac-Pangasinan-La Union Expressway, boosting unprecedented development in central and northern Luzon. To the south is the South Luzon Expressway, Skyway 1, Southern Tagalog Arterial Road Tollway, Daang Hari-SLEX Link Road, Manila-Toll-Expressway and the Cavite-Laguna Expressway. These road networks are now indispensable to millions of commuters and operation of all enterprises of the most productive regions of the country. Add to this the anticipated opening of the NLEX-SLEX Connector Road that will greatly multiply the benefits as thousands of vehicle traffic is diverted from Metro Manila’s circumferential routes.

Aside from transportation related projects, the Public Private Partnership Center lists critical public services projects in power, health, education, agriculture, environmental management and ICT for government.

When it comes to the light rail systems operating in the metropolis, notice that difference in service quality and maintenance of the lines operated by the private companies as compared to the ones operated by government. This is because of the inherent advantage of private enterprise to be nimble in applying new technologies, employ the best talents and mobilize capital resources to boost efficiency, productivity and scale. Applying the best business practices while being compliant to government regulations is crucial to their viability.

The electricity crisis of the early 90s where widespread brownouts closed down operations and proved costly for all business establishments are but far memories now that we enjoy minimal outages. Thanks again to the successful privatization of power generation and distribution utilities vital to the operations of all industries.

The water crisis of the late 90s was about poorly managed distribution system, then under the MWSS. It was also privatized and yes, the distribution problem was solved with the infusion of billions of investments to plug the leaks, upgrade and expand reliable services to the millions of consumers in the unserved communities.

Now it’s a different situation where it is the raw water supply, a problem that the private concessioners cannot act on without the go of government. If the impasse continues, 12 million inhabitants of the megapolis will be hit with a bigger water crisis which I predict the private sector will once again be called upon to the rescue.

One more point that I’d like to stress is about creating jobs. According to latest data posted by the Philippine Statistics Authority, the total number of employed persons in the country was estimated at 40.659 million. Compare that to the Civil Service Commission’s May 2019 data, the reports total of Career and Non-career government employees is only at 1,728,641, it is clear that it is the developmental, innovative and competitive nature of private enterprise powered by its capacity to wisely invest capital resources is what drives the forward economic momentum of our, and any country for that matter.

Government has an important role as regulator and enforcer of the law under our democratic system. If we want to accelerate our prosperity, shouting class-divisive threats is a dangerous tactic with self-inflicted consequences and may plunge us into a path that no one wants to go. There is always a win-win solution.

Topics: Orlando Oxales , Private sector , investments , infrastructure , Philippine economy , Pulse Asia survey
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