By Chino S. Leyco
The Duterte administration’s absolute zero state guarantee and no unwarranted obligation rules on private-led infrastructure projects will not change, two of the government’s economic managers clarified yesterday.
Finance Secretary Carlos G. Dominguez III and Socioeconomic Planning Secretary Ernesto M. Pernia said that the administration is against private infrastructure financing with unnecessary obligations and restrictions to consumers and the government.
Dominguez maintained that contracts submitted by private proponents, whether unsolicited proposal or under the “hybrid” public-private partnership (PPP), must not carry onerous terms and contingent liability.
Pernia for his part said that infrastructure agreements should be patterned after the Clark International Airport template, in which the government builds the projects, before it bids out the operations and maintenance contract.
While he looks at the “broader perspective” in terms of economic gains from private-led infrastructure projects, Pernia said their “SOP [standard operating procedure]” is that the proponents should not take a toll on government finances.
Last Friday, Pernia said in a press briefing that “a little gain to private proponent and a little loss to government (or vice versa)” may be considered to fast-track the implementation of the Duterte administration’s ambitious infrastructure plan.
He explained “more important is we should look at the big picture (or the forest not just the trees) in terms of gains to the macroeconomy—higher growth, employment, tourism, other economic activities, plus multiplier effects—resulting in tax revenues to government.”
But Pernia clarified with Dominguez late Monday that the National Economic and Development Authority (NEDA) has not abandoned the economic team’s policy against onerous terms and contingent liability.
“Of course, after all those terms are provided as conditions ala Clark template. It has been our SOP,” the NEDA chief told Dominguez in a mobile message, the finance chief forwarded to reporters.
Dominguez reiterated last Monday that the Duterte administration is not against PPP as a mode of implementation, provided that, issues hounding the previous infrastructure projects under this scheme were properly addressed.
Among the issues cited by Dominguez that “plagued PPP contracts” were automatic rate increases, non-compete clauses, commitments of non-interference, temporary restraining orders, and concessionaire-required government guarantees.
He emphasized that the administration’s infrastructure program is not only about delivery of services to the public, but also ensuring that the Filipino people and government are not burdened by unwarranted obligations imposed on them under PPP contracts.