FINANCE Secretary Cesar V. Purisima knows his finance but knows his politics better. In a recent Financial Times-First Metro-Philippines Investment Summit, the secretary read a speech saying that “the prevalence of the rule of law in the country helped in increasing the confidence of investors in doing business in the Philippines.”
The secretary was indulging in irony, for it is clear he didn’t want to appear to be lecturing his boss. The fact of the matter is that the present administration has shown little respect for the rule of law at least twice since it took over in 2010. The first was when it unilaterally canceled the $434.8-million (P18.7-billion) contract of the Philippine government with the Belgian firm BaagerwerkenDecloedt en Zoon (BDZ) for the dredging of Laguna lake. As a result of that abrogation, BDZ is now at the World Bank International Centre for Settlement of Investment Disputes seeking $93 million (P4 billion) in damages.
Already, the Philippine government has been told to pay $9.76 million (P420 million) for cancellation of the bank loan that was to finance the project.
The second exhibition of lack of respect for commitments was the recent cancellation of the Cavite-Laguna Expressway Project (Calax) winning bid and the rebidding of the project.
This prompted American Chamber of Commerce Senior Advisor John D. Forbes to note that the rebidding signified not just poor planning but an effort on the part of the government to “get more money from bidders who would recover it with higher tolls.” This last point needs elaboration. Any payment made to the government by the winning bidder for whatever purpose will have to be recovered from the user-public when the time comes, meaning that this government, through the winning bidder, will be gouging the eyes of the public before you can say Mamasapano massacre.
Unilateral actions such as these have at least two major effects: the direct effect of losses to the government in terms of payments to be made in restitution of the other party or losses to the consuming public in terms of higher costs to consumers because of government ignorance or inefficiency; and the indirect effect of loss of interest in the country by prospective investors, foreign and domestic.
Image credits: jimbo Albano
1 comment
The DOF is known for that. to sit on the MRT7 for 6 years requiring the proponent to come up with a performance undertaking is absolute nonsense and now the Swiss challenge being itself challenged by the mighty DOF for another purported documentation. The economic windfall this could have bought can not be quantified in peso terms. With 7 Months to go, no railway, no major toll road (except for the 4.5KM MCX) , No airports completed. The straight road is deserted .