Private sector shows signs of impatience

WHERE’S the big fish, and the little details?

Responding to presentations made by the country’s economic managers during the Philippine Mid-Year Economic Briefing on Wednesday, business groups are asking the Aquino administration to put in place a tougher anti-smuggling campaign as well as other policies to brighten up the investment climate.

Meneleo Carlos Jr., Federation of Philippine Industries (FPI) chairman emeritus, said the government should immediately enact an anti-smuggling bill to “plug the many loopholes in our Tariffs and Customs Code.”

Ramon del Rosario Jr., Makati Business Club (MBC) chairman, similarly cited the inability of the previous administration to curb oil as well as vehicle smuggling at the Subic Bay Freeport Zone.

The MBC official challenged the Aquino government to catch the big fish.

“Convicting one big smuggler must be a major objective,” del Rosario said.

Stable macroeconomic policies needed

Alongside intensified anti-corruption efforts, the government should come up with “stable” macroeconomic policies, he said.

Despite the pressing need for additional power generation projects to bring down electricity costs as avert an energy shortage, the “inconsistencies and unpredictability of policies” is a major deterrent to potential investors, del Rosario said.

He said President Benigno Aquino 3rd should “commit” to implementing market-determined pricing as well as forming a “firm and intelligent” regulatory oversight body to look into power projects.

The mining industry’s potentials likewise have yet to be tapped because of a still undetermined government policy on the sector, del Rosario said.

Carlos also asked the government to rationalize the country’s tariff structure vis-à-vis its Association of Southeast Asian Nations (Asean) neighbors “so we can be truly competitive with them.”

Tariffs between upstream and downstream industries should be looked into as well to promote domestic manufacturing, he said.

Credibility, trust are fleeting

Del Rosario said the government should move fast in putting in place the “enabling business environment” it has promised while it still enjoys an unblemished credibility and has the trust of the Filipino people.

“[But] credibility and trust are fleeting. [The Aquino administration in its] first year must focus on substantial efforts on setting the tone, [providing a good environment] for private investments,” he said, adding that it would be mostly the private sector that could bankroll investments that would sustain growth and create jobs.

Jon Lindorg, adviser for Public-Private Partnership (PPP) of the Asian Development Bank (ADB) agreed that the challenges for the Philippines are implementation, credibility and effectiveness.

Lindorg said the government should have the “credibility” in implementing the PPP projects.

“The challenge really is how the government will executive the projects going forward,” he said, adding that the country has the potential to attract private sector participation.

Socioeconomic Planning Secretary Cayetano Panderanga admitted that the government has a credibility problem, but assured that the Aquino administration will change this perception.

He said the government is set to impalement reforms to attract private sector funding for the country’s huge investment requirements in infrastructure over the next six years.

List of PPP projects by October

In his presentation, Paderanga said investment infrastructure is a “major challenge” for the government given the fiscal constraints.

The government expects a budget deficit of P325 billion this year or 3.9 percent of gross domestic product (GDP). In the first six months, the funding gap amounted to P196.7 billion.

The government expects its deficit to drop to 2 percent of GDP by 2013 up to 2016.

Because of this, Paderanga said the PPP in infrastructure development emerges as a feasible policy framework.

“In view of the huge investment requirements in infrastructure, government shall continue to encourage private sector involvement in the financing, construction, operation, and maintenance and rehabilitation of major infrastructure in the country, primarily in transportation, power and water sub sectors,” the planning secretary said.

Panderanga said projects that are being pursued under the PPP are the development and implementation of expressways, railways and airports; the privatization of individual ports or group of ports; and the operation and maintenance of transport facilities.

Specific infrastructure projects will be identified by the government by October, he said.

Before that, the government is working towards improving the technical, financial and legal, including contract writing, capacities of proponent agencies, the planning chief said.

“The proper allocation of risk bearing between the government and the private entity is an important area of concern for us,” he said, adding that the government will revisit the Joint Venture Guidelines and the Philippine Build-Operate-Transfer (BOT) law towards more transparent and more accountable processes and the faster implementation of projects. –BEN ARNOLD O. DE VERA REPORTER wITH REPORT FROM DARWIN G. AMOJELAR, Manila Times