SENATOR Grace Poe urged the national government to consider Public-Private Partnership (PPP), foreign direct investments (FDI) and the passage of the Public Services Act (PSA) in its economic recovery policies as the country reels from the ensuing coronavirus disease 2019 (Covid-19) crisis.
“A large part of our government’s rescue plan consists of accelerating its long-delayed ‘Build-Build-Build’ Program,” she said during an online forum on Friday. “This, I believe, brings forth an opportunity to revive a previously discarded concept that potentially reduces the trade-off between saving the economy and preserving our fiscal health—Public-Private Partnership, or what we have come to know as PPP.”
In these trying times, policymakers should realize the financial advantages of PPP over government-funded projects as it shifts project costs from the taxpayer to the user of the project’s services, according to the solon.
“By contracting out the undertaking of large projects that are commercially viable, the government can free up funds to spend on health care and poverty alleviation projects,” Poe said.
Transport sector
The legislator cited the transport sector wherein PPPs can save the jobs of service providers and build the needed infrastructures even during the crisis.
Notable of this, she said, is the “Move as One Coalition,” which proposes to engage 3,000 bus operators and 15,000 other public utility vehicles through service contracts that are worth P30 billion.
Likewise, it offers P10 billion in initiatives meant to enhance the walking and cycling infrastructure, and another P70 billion pesos in projects like bus stops, bus only lanes, depots and terminals, according to Poe.
The coalition sees that out of the P110 billion total cost of their proposals, they could gain P373 billion in returns over a period of three years that includes P34 billion in transport employment retained and P78 billion in avoided job losses for commuters.
“Our government has so far been reluctant to back PPP due to the perception that the private sector has abused the system by corrupting regulators and negotiating for itself terms that are overly favorable to its shareholders and onerous to the consuming public,” Poe said.
Play fair
She appealed to the private sector to be socially responsible if they succeed in persuading government to embrace the PPP mode of financing.
“Play fair, play by the rules and keep the public interest in mind. I understand that your shareholders need to make a return on their investment, but if the consuming public loses out in the end, it will only reinforce the government’s suspicions towards PPP and take us back to the default alternative—government-undertaken projects and all the inefficiencies and frustrations that come with the territory,” she said.
The lawmaker, though, cautioned of one major economic stumbling block that pertains to inadequate local capitalization to extend loans and even bailouts to every sector of the economy.
“Banks are constrained in lending by many regulations. Recovering from this crisis, may require opening up our country to more foreign direct investments,” Poe noted. “These investments will provide the capital infusion needed by several industries including manufacturing, transportation, logistics, and telecoms.”
Bill filed
Mindful of the strict foreign ownership in public services in the country, the senator has filed a law that seeks to liberalize the economy.
Her bill, which seeks to amend the Public Services Act (PSA), will attract the entry of more players and capital investments and, eventually, improve competition, resulting to better consumer service.
While there are concerns that foreign ownership of vital industries could pose threats to the country’s safety, Poe allayed public fears on this matter.
She reiterated that the PSA gives the National Security Council the power to review and the president may suspend or disallow FDI transactions if they involve critical infrastructure that threatens to impair the nation’s safety.
“Increasing FDIs and promoting national security are not conflicting goals. The country can have both as long as proper safeguards are observed,” the senator stressed.