Do you trust the people running the Philippine economy?

[See note following article]

By Joe America

I don’t trust the people running the Philippine economy. I think they are blowing smoke downwind whilst sailing upwind into the impossible circumstances set before them by President Duterte.

The economic POLICY of the Duterte economy is anchored on two principles: (1) managers will continue the successful programs of the Aquino Administration, and (2) to that they will add the benefits of accelerated infrastructure development under the “Build Build Build” program.

But what do we read about? We read about a weaker peso, Korean and Japanese investors leaving, BPO industry in limbo, flagging tourism, an uptick in inflation, a downtick in jobs, GDP growth at the low end of the expectation range, sagging stock market, and a lot of mouthings by financial people assuring us that everything is in good order.

The factual signals tell us one thing and the people tell us to ignore any signals that suggest things are not going well.

I’m reminded that crooks never admit to having stolen anything, and people who are failing always have a story to tell that suggests they did not fail. Someone else did.

Time passes quickly. President Aquino discovered that as he worked diligently to implement his PPP infrastructure development program through the onslaught of contested contracts and Supreme Court TRO’s. I think the “Build Build Build” policy makers are running face-first smack into the realities of getting their big projects done as well. They are not building fast. They are finishing Aquino projects and holding them up in the headlines as signs of active development. Beyond that, they are just talking and facing the realities that President Aquino faced. It takes time to plan, agree on, and execute huge infrastructure projects. Securing rights to land is not easy. It even takes time to get Chinese money into the Philippines.

We are 14 months in and projects that take 3 years to complete have not even been started yet. The “Build Build Build” projects will get completed during the next Administration. I dare say no one has the courage to admit that President Aquino and President Duterte will get about the same results on infrastructure development.

And if President Duterte insists on running a dark and deadly, unstable nation requiring martial law, then his overall economic results will be much worse than President Aquino’s efforts, which got the UPGRADES to debt ratings that now serve the Duterte financial people well. President Aquino worked hard to show and produce stability, and President Duterte is working hard to show that the nation is a poverty-wracked, terrorist-ridden, drug-infested slaughter house with guns and bodies everywhere.

I read this report a couple of weeks ago: Economic team set to roll out capital market reforms by 2019.

As I understand the story, what the financial wizards beaming in the photo want to do is improve the sophistication of the ways in which Philippine government’s peso debt is chopped up and put out into institutional markets. That is, they will produce better dealer support, increase issuances, and fine-tune regulations for technical instruments like derivatives and repurchases. They want to add sophistication to tracking reports to assure a smoother, more predictable marketplace. This would give investors better tools to work with and deepen the markets.

Improving debt distribution seems to be good thinking, actually. And I imagine it would improve the ability of the Philippines to fund infrastructure development as debt is sold out to investors who would have confidence that the Philippines would be able to repay its debt.

Confidence.

Requires.

Stability.

As long as the President is on the page of INSTABILITY, how it the world are we supposed to trust what his financial managers are trying to do? Investors will invest in debt instruments only if the interest rate is high enough to justify the ‘instability risk’. So the Philippines will spend a lot on interest as investors take up the shiny new debt instruments.

To have a vibrant economy, the nation must get on the path of showing and proving STABILITY by strong, consistent PERFORMANCE. Capital markets would soar under those conditions. But the President is on a different page than his financial managers. He needs instability to justify autocratic controls. The financial managers need stability to attract the investors to keep the economy humming.

It is hard for trust to exist when leaders are putting out messages that conflict. Every well-intended pronouncement by the financial managers is sure to be met with skepticism because . . . well, the guy promoting instability? . . . he happens to be their boss.

____________

The above Photo is from PhilStar Global Business News, showing participants at the Economic Journalists Association of the Philippines forum on the economy. In the photo are (from left) Karen Lema of Reuters, Finance Undersecretary Karl Kendrick Chua, Socio-economic Planning Secretary Ernesto Pernia, Budget Secretary Benjamin Diokno, Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr., EJAP president Chino Leyco, BusinessWorld research head Arnold Tenorio, and ABS-CBN assignment editor for integrated news Liza Reyes.

 

Comments
97 Responses to “Do you trust the people running the Philippine economy?”
  1. Technocracy has its limits. Marcos found them – he had excellent technocrats, such as the late Blas Ople, working for him, but he still blew the economy to pieces. Does anyone really think that this time it will be different?

  2. arlene says:

    Same here, is he even concerned about where our economy is going? Seeing what we have now, I think it is not his priority, his focus is to kill, kill, kill.

    Good morning Joeam!

  3. Wilfredo G. Villanueva says:

    Picture a monster with two brains, one a-building and the other a-killing, arms that fly in several directions, feet that go backward to the cave and forward to NIC status, and eyes that spot rape prospects whilst at the same time crying over unfortunate brethren in caskets and you get the idea of how the Philippines as a whole looks like to investors.

  4. karlgarcia says:

    They are counting on the tax reform package to be approved by the senate this year.
    The economic managers are blaming the lobbysts for the delay and they are still hoping.

    If Build program is failing, then how will Marawi rise, the war is not yet even finished.

    Who wants the nation to fail? No one,but things are not looking well.

    Build build build! got buried by Killl kill kill.

    • The problem is that if an economist has to blame people, the economist did a poor job of factoring ‘other people’ into his calculations. Catch 22. No escape.

    • popoy says:

      IF I May, Karl. If you are SAYANG, este science pala you could EITHER be a NATURAL or SOCIAL. Ergo, confronted by life’s issues you are either strongly OBJECTIVE or hopelessly SUBJECTIVE. I am too and we are not alone, social scientists like the homo economicos may refuse to join our ranks of wish good (assumptions) homo sapiens.

      Facebook, Twitter and Fake news are social (subjective) in their GOOD or BAD intentions. Economists with their economics are SOCIAL in their ASSUMPTIONS full of good intentions vulnerable to backfires.

      Whereas meteorologists are a natural (even if their forecasts are mostly wrong) as the wet and dry season, as accurately as autumn follows summer, winter follows autumn, then spring brings forth the flowers and seeds of life. There are no good or bad intentions of being NATURE like droughts and floods, tornadoes, hurricanes, earthquakes, tsunamis and perfect storms. No gut feelings, NO ASSUMPTIONS.

      The point, what is the point of this circumlocution ? Just be careful with the macro variables of economics. Be careful with the inadequacy of Political-Economy of the good life. Like, social media tends to do a cost-benefit analysis of martial law, of the EJK. At least to me, it seems impossible even just to get a B/C ratio = 1.

  5. Sup says:

    Wishful thinking…

    ”DAVAO CITY, Philippines – The boom in Mindanao’s construction sector is seen to potentially “pull” migrants in the congested Philippine capital to return home, industry leaders said Tuesday, September 5.

    With the rise of public and private investments in the south, “the boom will help unclog Metro Manila,” said Patrick-Lawrence Tan, chief executive officer of Global-Link MP Events International (GLMP).”

    https://www.rappler.com/business/181246-mindanao-construction-boom-migrants-return-from-manila

    • Hahaha, more nonsense. Nothing will unclog Manila. It is a populist argument, feeding the trolls.

      • Sup says:

        Tan sounds….Chinese?

      • popoy says:

        Lindrell says he likes anecdotes as there may be others like him in TSOH , so here is a classic? one. I heard this in one of the gatherings (symposia) of ESKOLAR NG BAYAN DAW (mga taga UP) from no less than a former Dean, I can perhaps now consider as the Harry Potter of FINANCE during Martial Law years of the Marcos Administration. It is a classic tale since lots and lots of people had heard it before.

        Dimmed memory should explain the yarn’s errors.

        Surviving a shipwrecked, four professionals were marooned in a small island west of the Philippine Sea. The ship’s Chef who is a Chemist, a Mechanical Engineer, a Lawyer, and an Economist swum the waves to shore. Very hungry, they fine-tooth combed the white beach looking for food. Alas, they found a can of pork and beans. The lawyer said let’s think and discuss and agree how to open it. The Chef said let’s boil it until it pops open. No, said the Mech Engineer, let’s look for a sharp stone to open it. No, No, NO. interjected the ECONOMIST, Let us, all of us ASSUME a can opener.

        So am I right to ASSUME a lull before the smiles and someone’s giggle?

  6. NHerrera says:

    WHAT WE HAVE HERE IS THE FAILURE TO SYNCHRONIZE THE LEFT AND THE RIGHT HAND — THE BRAINS AND THE MOUTHS.

    The last two lines of the blog article:

    But the President is on a different page than his financial managers. He needs instability to justify autocratic controls. The financial managers need stability to attract the investors to keep the economy humming.

    It is hard for trust to exist when leaders are putting out messages that conflict. Every well-intended pronouncement by the financial managers is sure to be met with skepticism because . . . well, the guy promoting instability? . . . he happens to be their boss.

    It strains one then to trust the Philippine Economic Managers under that situation.

    • Maybe there is a Duterte fan who can explain how martial law is good for the economy.

      • Edgar Lores says:

        *******
        Secretary Ernest Pernia tried:

        “I think foreigners have to be informed that if they come here and they behave, they didn’t do anything, they don’t do any misdeed, then they’re safe… If we have peace and order, which is the bedrock of the 10 points, the foundation of the 10 points, then the investment climate will definitely, substantially improve and many will be rushing to the Philippines to invest.”
        *****

        • Ok, what did the Korean do?

          Where are his killers now?

          They forget that foreigners usually have longer memories than Filipinos, and exchange infos.

          • karlgarcia says:

            Why do we have so short memories, after being buried figuratively and literally by another headline it is as if the event never happened.

            • Edgar Lores says:

              *******
              It’s due to technology — the cell phone and the Internet of Things.

              We all have become addicts.

              Addicts to chattering, googling, blogging, the 24/7 news cycle, Facebooking, Twittering, Instagramming, Pinteresting, etc. Not to mention gaming and entertainment media.

              The Internet provides us with an enormous tsunami of information. Who can remember when there’s so much? Who needs to remember when you can google?

              Our synapses have become simply overwhelmed.

              The horrific events we are exposed to also have a numbing effect.

              Two hundred years ago, the main modes of transportation were horse and sail. People mostly walked and rarely traveled beyond a radius of 7 kilometers from their home. There was no radio, no TV, no cinema, no phone, no computer.

              In those times, people could remember things. And as they had little entertainment, they tended to replay their fond memories over and over again.

              There was only one drawback: there was not much to remember. It was borrrriiinnnggg.
              *****

          • NHerrera says:

            Nice. The idealization or rather the rationalization of Pernia, and the killing of Korean businessman Jee Ick-joo inside the PNP Headquarters is a sharp illustration of why Pernia’s statement is a “lot of bull.”

            • NHerrera says:

              I was an earlier admirer of the economist Pernia. But he has ruined it for me with a lot of his political statements. Methinks he should stick to his economic management. But I suppose, he has to comply to the urgings — to make some such statement. Such as the urgings, to others, to do the fist salute (conjecturing here).

        • The reality is that insecurity is intangible. Words don’t help. Only facts help, and factually speaking, murder is easy in the PH and PNP impunity is impunity for all. Facts, two white guys in my small 150,000 population province have been killed in the past 6 months. How am I to feel secure reading his words? (rhetorical)

          • NHerrera says:

            Two in 150,000 or 1373 (=2*103 mil/150,000) over a PH population of 103 million. That is less than the most recent number of 13,000. Just doing the numbers Joe, unrelated though they may be. Not anything to be secure about, I agree, Pernia notwithstanding.

        • josephivo says:

          “…if they behave, don’t do anything…” with a president proud of planting evidence? With even a supreme court for sale?

          Peace and order is so much more than declaring martial law.

      • popoy says:

        TSOH, I am no fan, not even an electric fan of no one, but I have already posted up way above this:

        The point, what is the point of this circumlocution ? Just be careful with the macro variables of economics. Be careful with the inadequacy of Political-Economy of the good life. Like, social media tends to do a cost-benefit analysis of martial law, of the EJK. At least to me, it seems impossible even just to get a B/C ratio = 1.

        And of course, also the joke posted too above , about the economist I heard from the no less than the financial wizard of Martial Law.

  7. Miela says:

    I would not trust anyone who does not know the difference between “pledge” and actual investment.

  8. Gemino H. Abad says:

    All words and gunfire from the present administration — all “blowing in the wind,” as the song goes.

  9. Sup says:

    Duterte and his eco-comics team will soon say ”Thank you North Korea….”

    Peso firms up as NoKor bomb test keeps dollar weak

    http://www.gmanetwork.com/news/money/economy/624623/peso-firms-up-as-nokor-bomb-test-keeps-dollar-weak/story/

    • NHerrera says:

      FACT CHECK ON THE PHP PER USD

      Shown are four regional currencies relative to the US Dollar for 11 consecutive dates. For comparative purposes I normalized the currencies to 1.0 on the first date. (The lower the number relative to USD, the stronger is the currency.)

      Indeed the PHP firmed up — but with greater volatility — compared to Singapore’s SGD and Thailand’s THB which strengthened beside being less volatile. Thus, the latter two currencies strengthened relative to US Dollar, if indeed the Dollar weakened courtesy of KJU, but not so the PHP beside being volatile as noted above.

  10. Gilda R. dela Cruz says:

    I have argued many times with myself why would any President do what our President is doing now? I agree with what your article says, that our President promotes instability. But why would anyone do that? And what could be the objective? I don’t like Duterte as President and wished we had someone like Aquino or Mar, my contemporaries in age and generation. But I refuse to accept that no matter now criminal or evil Duterte is, I have yet to encounter a Filipino who is as vicious and nefarious as the infamous figures of WWII. Somewhere inside him is a Filipino who cheers when Pacquiao wins, who reacts when Filipinos are put down, abused or are maltreated by foreigners, regardless of ethnic origins. So what;s with Duterte?
    For one, he allies with the Marcoses, even putting down our VP, even if the Marcos children are exactly the kind of people he despises, corrupt, rich and lazy, walang alam, etc.Indirectly allowed the burial of the former President in the Libingan ng mga Bayani, Two, he forges ties with China and Russia, pisses off the US, picks a quarrel with the allied countries, allowing China to build military structures in Scarborough Shoal. This, despite his drug war where thousands have died including govt officials. His son is now implicated in the recent drug shipment. The source of our drug problem is China, yet he seems to be buddy buddy with the Chinese. By killing the mayors and his son now implicated, the President implies he wants to monopolize the drug industry in the country. Third, he allies with the left, freed the communist prisoners and even appointed them in sensitive govt posts. Now he is at odds with them, with Joma. Had them all, including his Muslim brothers, inside Malacanang. He planned govt programs with the Maute brothers, who he has ordered now destroyed, beginning with the founder and older Maute patriarch, who died in prison.
    During the campaign, I remember Duterte sounding like a husband patiently and sincerely asking his wife to trust him despite what she sees and hears,”just trust me” he said. I don’t trust him but something in the way he said it made me believe I should trust him. Maybe it is the same thing that draws him to close to women. I don’t know.
    Could it be that he sincerely wants the Philippines to be one of those countries on top of the heap,having seen its potential and the preference for the Philippines because of the combined races and nationalities that run in our veins,including our proficiency in English, making us the ideal partner in business, at work, even in marital unions? But that what prevents us from achieving this is our lack of patriotism, bravado (which he himself displays) largely influenced by European and Western colonizers, pitting us against each other? That we need large amounts of money to build our country, based on their 3 year infrastructure program build, build, build yet, he does not want the country to be helped or aided with US money. That he sees drugs as the source of funds, and the fastest, that will financed his dreams for the Philippines, yet he does not want to make the Filipinos to be addicts or victims of this drug, that’s why his orders are to kill both the users and the pushers, kill the mayors, the generals who make the Filipinos addicts, with only the non users left to run the country and he will be the sole controller of this drug. That he suddenly throws cases filed against Imee, wants to retrieve what the Marcoses stole from the country, that he would never allow Bongbong Marcos, with his brattish ways, to run the country. That he appeared coy and squeamish, even protective (he didn’t allow the impeachment case thrown against her) of the VP signifies that he acknowledges her purity and naivete in politics. He has consistently contradicted his ways from the time he sat as president.
    What I am saying is, could it be possible that with the President, capable of being very emotional and sentimental, and with his unorthodox ways and love for drama, sees this as the only way to push the country upwards, that he is the only one who is willing to do it this way, that as soon as he achieves his goals, he will step down and install the VP as the new president, (he said this many times) validating his statements that he doesn’t like being president and doesn’t see himself finishing his term.
    I was just wondering if this is possible.

    • Sup says:

      He is still thinking and acting as a town mayor, look at his hands in the pockets, threats and use of non presidential word choices…but Davao is also still not drugs/criminal free after all those Duterte years…..

    • Yes, it is possible. It is also possibly that he is completely oblivious to the horrors he imposes on others, as was every other despicable, deranged tyrant who, from within the iron cage of conscience, was seen as righteous, whilst from without, a horror of horrors. And I would worry about the emotional health of anyone who worked diligently to put silks on this particular pig’s ear without the grief of Kian and 13,000 other families touching them.

    • chemrock says:

      NO NO NO NO NO…..because of the BPI accounts.

      • canadadry says:

        I agree..
        the smoking gun against Du30 could be the BPI account. Kaya hindi ni Du30 mabigyan bigyan ng waiver. But at this time it could have been transferred elsewhere. But still the paper trail exists.

    • Edgar Lores says:

      *******
      First, define the problem. Then the solution.

      What is the problem? Is it corruption? Is it lawlessness? Is it the economy?

      Duterte thinks the problem is lawlessness. And his solution, his way, is killing.

      His definition, together with his solution, is a vast simplification of what ails the country.

      And his way is lawless because it is against the rule of law.

      How will lawlessness solve lawlessness?

      The “only way to push the country upwards” at this time might be for him to step down now, which he promised upon the non-completion of his mission after 3 – 6 months… then after a year.

      He might also consider applying his way on himself.

      But he has no honor.
      *****

  11. madlanglupa says:

    Investors look carefully at a country’s level of stability. Unstable governance, persistent red tape, nepotism, corruption in general, and the inability to create and provide the basic building blocks for a good investment — whether meeting the basic needs of the average Filipino who are also their potential employees, or cost-effective, proper and working utilities (high cost of electricity and inefficient telecommunications) — along with the state of law enforcement, all splattered on the front pages, is scaring them off.

    This government is bent on insisting that mainland China offers the best and the least to shrink away from investing, when it’s too easy to know about Sri Lanka, Pakistan, and several African countries.

  12. Cha Coronel Datu says:

    The business sector’s spirits apparently have been watered down by rain, bombed out by the still unresolved conflict in Marawi, and dragged down by the depreciating peso. As with the war on drugs, Duterte is really killing it.

    http://business.inquirer.net/235775/business-confidence-falls-3-year-low

  13. chemrock says:

    Much has often been said that Duterte continues witht the good economic policies of Pnoy. However, this is fundamentally incorrect. Projects that were W-I-P of course the new admin has to complete them. But look at the critical policies of Pnoy that has been swiped aside :
    – PPP is bye-bye-bye. PPP is at odds with Build Build Build. PPP is also at odds with a man who wants revolutionary govt.
    – The pivot to China is a paradigm shift of economic policies.
    – Pronounced deficit budgetting is in sharp contrast to Pnoy’s development through savings.
    – Pandering to Leftists’ ideologies and socialism is not Pnoy economy.
    – You can drill down to lots of micros — such as the SSS thingy.

    No Sir, this admin is not buildng on the good work of the previous admin. This admin came in with a lot of old baggages of admins before Pnoy’s. The policies are one-step forward, two-steps back. With potential to go back all the way to the Marcoses.

    Every DDS (dose dumb supporters) went viral with Ramon Ang’s quote on 10 June 2016 – “Mark my word. This country will fly”. Ang is well known contributor to Duterte’s election campaign. But nobody checked if he too contributed to Mar Roxas. I’m sure he did. These businessmen were buying insurance. Here’s the thing, a few months back, in a TV interview (I think it was Karen Davila on ABS-CBN) Ang spoke out against the scrapping of PPP. He alluded to the rise of corruption with the upcoming China projects given the lack of disclosures and public biddings. Of course he is crying over spilt milk — he is not in the inner circle of privileged elites cornering the build build build. When I saw the TV interview I though wow!. What is this? But not a whimper from DDS people.

    Would be great if Karl can dig up this interview.

    The economic team is now preparing the scapegoat in the eventuality of economic failures. Blame it on Congress for not passing the Tax reform, the fanciful TRAIN. If Congress does not pass the tax reform, it simply means the economic team have not convinced Congress of their economic plans. Translated it means no porky no talk. If sycophants don’t trust the economic team, who’s gonna trust them?

    • Interesting, on Ang. I think the Aquino policies they intended to follow were technical central bank and NEDA oversight of infrastructure. Scrapping the PPP was a part of the speed-up goal of ending lawsuits and TROs (and bidding?). Same with deficit spending. Leverage up and go fast.

      Great on paper distributed by trolls and puppets. No pudding yet.

    • josephivo says:

      Indeed, Pnoy’s policy started with no wang-wang, or leveling the playing field. (a gargantuan task in the Philippines, but some small progress was achieved) Today is see again more and more cars with red and blue flashing lights…

      Economy is more than what economists tell.

  14. chemrock says:

    Meant to say this but forgot in the above.

    The build build build is slow slow slow. Joe suggests the admin is finding out that projects are not so easy to kick off as they thought – it was easy to criticise Pnoy admin, another thing to do the work themselves.

    I say some truth in there obviously. But I posit the delay is something conspiratorial. The elite that is going take the biggest bite of the build build build apple is the one that will own the steel mills. They are gonna be the JP Morgan of Philippiines. There can be no build build build until and unless the steel mills start production. We have a catch 22 going on. Strange, I seem to have heard many months ago someone said Philippines should have its own steel manufacturing plants.

  15. popoy says:

    It’s 1:30 AM where I am. Pagpasensiyahan sana ang matanda na mangarap sa
    Nakaraan. Practically grew up in the city. Pasyalan at tambayan bago mag
    Martial Law, tahimik na Morayta at Mendiola, dami kasing kolegiala. Inuman
    Ng San Mig at Kalkal ng lumang libro sa Azcarraga. Pero hanap at pangarap
    Tahimik at mabango, kabukiran tirahan ng mga mahirap at marangal. Kaya
    Ayun nag ambisyon sa Los Banos, batang siyudad upang matupad ang pangarap.

    Pasensiya na Zuckerberg este JoeAm parang naging Facebook ang dating sa TSOH Eh.
    Isang nobody gustong maging nobody natupad naman.

    • popoy says:

      After Los Banos, I must live the dream so, volunteered to Odiongan, Romblon (no cinema, no electricity) just the sun and gaslight to illumine the pages; tuba after office hours, crossing rivers, trekking rice paddies, climbing hills, just to serenade local Indays, dark nights and moonlight nights.

      What a dream, este what a life of songs and honest toil . The songs, the wails of guitar turn the ventricles and the aorta unsoiled by cholesterol. With a monthly pay of Peso 147 per month, there’s more than enough for Tuba which improves not the voice, but the nerve to belt a tune.

      dungawin mo sana

      DUNGAWIN M HIRANG

      O ILAW

  16. Micha says:

    A PPP scheme contracted by the national government is essentially an organized looting of the national treasury by profit-seeking private corporations.

    There’s paltry justification for why the national gov’t which has recourse to available resources should, for a given period, hand over ownership of a public infrastructure to a private corporation. Those big players operate like a cartel swooping down on gov’t contracts with sovereign guarantees and smirk like a cat who’d just swallowed a parakeet as they make their way to the bank.

    • I rather think the Philippines has not demonstrated the ability to handle any complex matter competently and without anomalies under ANY framework. So your recommended approach would fail, too. Big businesses here are demonstrating competence, and entering the global arena. I trust their operational skills more than the State’s.

      • Micha says:

        Nonsense.

        Would you be comfortable if a profit-seeking private corporation were to run the state’s police and military system? Public education? Roads and highway system?

        Question of competence can easily be solved by professionalizing gov’t bureaucracy. Easily said than done, yes, but that doesn’t take away the premise that a profit-seeking private corporation should never take ownership or collect fees and rent from a publicly funded national infrastructure project

      • Micha says:

        The very notion of a profit-seeking private entity taking over a publicly funded national gov’t project, services, or infrastructure is an oxymoron.

        • There would be government rules and oversight, not abdication.

          • “2. Public-private partnerships are more common than you may think.

 Public-Private Partnerships have been in use in the United States for over 200 years. This contractual arrangement is often used for water/wastewater, transportation, urban development, and delivery of social services, to name only a few areas of application. Today, the average American city works with private partners to perform 23 out of 65 basic municipal services.”

            From ESG operations web site http://www.esginc.net/partnerships/partnership-resources

            • Micha says:

              Joe, in the US an important distinction between local and federal gov’t needs to be made.

              PPP scheme between local governments and private corporations, yes.

              PPP scheme between federal gov’t and private corporations, no.

              When Lockheed Martin gets a contract from the federal gov’t to build a fighter jet it does not rent out the finished product to the Pentagon. Uncle Sam merely gives them the check and the Lockheed executive deposits it in their bank and plans for a vacation in the Bahamas next summer. No renting out, no collection of fees for 20 or 30 years. Ditto for federally funded roads, dams, or NSA spy building in Utah.

              Local gov’ts such as the city of Chicago, on the other hand, do indeed employ PPP schemes because they are constrained by available funds to build, for example, that flyover at the outskirts of the city. The partnered private corporation then sets up a toll both to recover their invested funds. No such scheme is employed when the federal gov’t builds a road, a bridge, or a dam.

              In that vein, it’s a feat of hocus pocus wizardry that Manuel Pangilinan gets to set up a Metro Pacific tollgate at both ends of the North Luzon Expressway, thanks to the collusion of our corrupt nationally elected public officials, past and present.

              • Incorrect again. The Federal government hires prison management, cloud computing, private security, and billions of dollars of other services from the private sector. Sometimes it works, often it does not.

                Oversight is important and in the Philippines oversight means ‘in bed with’ the private contractors, so Pangilinan gets his way. My point is that defining private as good or bad is not the issue. The issue is setting up the management process so it selects and deploys earnest, honest people within a national framework that people understand and want.

              • Micha says:

                Hiring (and paying) for goods and services is NOT a PPP scheme. It’s just routine market transaction of buying and selling. The outsourcing of prison management came out of state officials’ jurisdiction, not the federal gov’t.

                “A PPP scheme typically involves a private entity financing, constructing, or managing a project in return for a promised stream of payments directly from government or indirectly from users over the projected life of the project or some other specified period of time”.

            • sonny says:

              Very interesting read & reflection, Joe.

              The article makes me realize that society ramps up from simple to complex as naturally as gravity always implies a motion down as well as up all the time as long as “superior primates” are involved. (I just watched 2001 A Space Odyssey a second time after 50 yrs). It is the nature of the beast (multi-valent) … that God endowed with intellect and choice.

              • sonny says:

                Micha, it’s also the Chicago city government I had in mind on mention of PPP. (one needs to take a quick look at the metropolis’ history, evolution and adaptability. Incidentally too, I think this city’s budget is pretty close to our Phillippine budget and the politicians do behave with the similar set of motivations and attitudes. IMO)

              • Thanks, sonny. 2001 is a great movie. Boring, exciting, mysterious, symbolic, thought provoking. But I always laugh because when I first saw it in a large theater, the obelisk was floating through space when a loud male voice from the rear exclaimed: “There’s that damn door again!”

                It took 10 minutes before the audience stopped laughing.

                Sometimes complexity gets lost in the translation.

              • sonny says:

                Futuristic movies were always a favorite: there were Flash Gordon & Buck Rogers to blaze the trail for most of my age group. Thus the big surprise of 2001-Space Odyssey (1968), Barbarella & 10,000 BC notwithstanding & prequelling, we in Manila still needed to experience the Space Race played out stateside to understand Kubrick’s & Arthur Clarke’s extrapolation of the space race beyond the giddiness of Cape Canaveral.

              • PLEASE! Do not mention Barbarella and 2001 in the same sentence!! Haha!

              • sonny says:

                Ha ha. We took on all comers, Joe!

            • Mary Grace P. Gonzales says:

              a. “A PPP scheme typically involves a private entity financing, constructing, or managing a project in return for a promised stream of payments directly from government or indirectly from users over the projected life of the project or some other specified period of time”.

              b. “The very notion of a profit-seeking private entity taking over a publicly funded national gov’t project, services, or infrastructure is an oxymoron.”

              Internet connection problems and work deadlines often result in my often delayed reaction, comments and posts.

              Wait, wait… the above paragraphs from Micha’s comments confuse me.

              Is PPP “private entity financing” ? … or “publicly funded projects taken over by profit-seeking private entity”. My comprehension power is dulled by side effects from my prescribed drugs.

              My impression is that PPP is one where a private company (or consortium) put up investments to finance infrastructure projects and then will recover their investments via tolls paid by infrastructure users.

              Investors naturally seek profit from their investments; they are not philantrophists of donors giving out their billions out of goodness of their hearts.

              In the absence of donors with aids and/or grants, we encourage investors because our country could not afford to put up the needed funds. Later, citizens will then indirectly contribute to repayment to said investors through tolls as taxes being paid are not sufficient to cover social services, existing debt repayments and infra projects.

              We acknowledge those realities and I for one, am willing to let free enterprise in in the nation building as opposed to Chinese loans which could end up with the Chinese owning the completed projects because we might not be able to pay back those high interest loans. We just need to review the guaranteed rate of returns so public interest as a whole will not be sacrificed. The MRT/LRT experience comes to mind.

              Lessons from other countries who availed of those Chinese loans should alert us.

              Note: I seem to have lost the auto spell check which usually helps me minimize typos and avoid the aarrgghhs…

        • popoy says:

          CLEAR AS DAYLIGHT AT NOON is the DIFFERENCE between PUBLIC ADMINISTRATION AND BUSINESS ADMINISTRATION as social sciences and as professions/occupations. PUBLIC ADMINISTRATION is for SERVICE and seeks NOTHING ELSE. Whereas BUSINESS ADMINISTRATION SEEKS PROFITS and is for NOTHING ELSE. To MISINTERPRET that is to be a miseducated IMBECILE.

          Public Administration like priesthood or a ministry is a CALLING. VULNERABLE but almost DIVINE. The difference is as ubiquitous as GREED and CONSCIENCE.

          The lethal factor which made the Marcos Martial Law a failed adventure is the BUSINESSATION of Government. But take serious note even without a declared Martial Law CRONYISM, RAPACIOUS PUBLIC BORROWINGS, LARGE SCALE LARCENY and UNBRIDLED and UNCONSCIONABLE GRAFT AND CORRUPTION need only business architects to strip people of their food and clothes on their backs .

          Unlike a DREAM, IDEALISM can be CONCRETIZED. Take the UN TOP TEN DEVELOPED COUNTRIES and perceive CONSCIENCE in their business organizations and admire the SERVICES provided by their governments. Do that and there SHALL BE OPENED EYES, and less eche bucheche of intellectual snoozers in noodle land.

          • popoy says:

            BUT WHAT IS THE POINT after you remove the high falluting goobledegook and eche bucheche of words?

            Says, Sir Arthur CD: Elementary My dear Watson . . . Let NOT the President , his family members, his relatives and friends, his cabinet members, his Generals, his corporate Gods, down to the janitors and casuals, LET NOT ALL OF THEM make the Government a BUSINESS,

      • Francis says:

        To be honest, there is a point in being wary of the (Filipino) private sector.

        If the PH State is rotting—it isn’t a surprise that the (Filipino) private sector is also quite dirty. Some academic perspectives on PH politics actually portray our corrupt state as complementary and synergistic with an equally corrupt oligarchy. And this isn’t just a socialist critique—this synergy is also bad, inefficient capitalism. The capitalism of cronies that hinders the market from promoting the most efficient use of scarce resources.

        I once skimmed through a few chapters of Hutchcroft’s “Booty Capitalism” which tried explaining PH politics through the prism of the PH banking industry. He described PH State as a “patrimonial oligarchic” state, where an “oligarchy captured an incoherent bureaucracy” as it were.

        From the perspective, I would say that the long-term solution (which cannot be avoided at all, if one wants to truly create a prosperous Philippines) is to create an efficient PH bureaucracy, a state that can tell those congressmen to “get lost” when necessary—especially in the pursuit of long-term goals.

        • popoy says:

          “To be honest, there is a point in being wary of the (Filipino) private sector.”

          Sir Francis, pardon the temerity and presumptuousness. In the pus of their sores and cankers for the poor, the private sector is MIRROR of the public sector.

        • I am sure Filipino businessmen know how the game is played where incentives are a way of life to get anything done. Many in the business community were hostile to ‘clean’ Aquino and quiet under Duterte. They are no longer blocked from making money by paying for the right. We can propose any form of government and mix of private or public service providers. The character of the nation is unlikely to change much and so the results will be the same. Until there is a good totalitarian with star power.

  17. Dutertenomics or leaderless economic theory?

    Is the PH Economy on auto-pilot or had been relegated to being irrelevant?

    Will the Congress bear the brunt of FAILED economy in the future?

    “The Philippines re-branded its economic agenda on Tuesday and promised “audacious policymaking” by President Rodrigo Duterte under an ambitious program named “Dutertenomics”, showcased at a high-profile event he did not attend.”

    http://www.reuters.com/article/us-philippines-economy/philippines-policymakers-push-dutertenomics-rebrand-without-duterte-idUSKBN17K17F

    “Malacañang failed to invite Vice President Leni Robredo to the second Legislative-Executive Development Advisory Council (Ledac) meeting held on Tuesday, August 29.”

    https://www.rappler.com/nation/180547-vice-president-leni-robredo-not-invited-ledac

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