NOW  FOR  SOME  BAD  NEWS  FOR  RP

MANILA, JANUARY 20, 2007
(STAR) HIDDEN AGENDA By Mary Ann Ll. Reyes - The Philippines may be made to pay not just P3 billion but a whopping $1 billion or around P47 billion after the Court of Appeals junked a petition seeking to prevent the Pasay City Regional Trial Court from implementing its decision ordering the government to pay Piatco P3 billion as just compensation for the controversial NAIA Terminal 3 project.

According to Bong Bernas, lawyer of Rep. Salacnib Baterina of Ilocos Sur who filed the petition and also intervenor in the expropriation case pending with the Pasay City RTC, the order of Pasay City Judge Henrick Gingoyon directing the government to pay Piatco P3 billion would have negative impact on the two arbitral cases the government is facing in connection with the NAIA 3 before the international courts.

The Supreme Court had upheld the pay order of the lower court. Judge Gingoyon was murdered shortly after he issued the order. He was replaced by Judge Jesus Mupas who commissioned a three-man panel to determine the just compensation of the terminal built by Piatco.

Bernas expressed apprehension that the Philippine government would lose in the $425 million investment claim filed by Fraport AG with the Court for Settlement of Investment Disputes (ICSID) in Washington DC and the $565 million PIATCO claim before the Singapore-based International Chamber of Commerce (ICC) in separate efforts to recoup their alleged investment in the construction of the terminal.

Baterina told the CA that the issue on the ownership of the NAIA 3 should be first resolved before the payment to Piatco is made. He has also emphasized that since the lot where the terminal was constructed belongs to the government, it follows that the building is also owned by the government.

Because of the CA ruling dismissing the petition seeking to bar the pay order of the Pasay City RTC, the Philippines may be held liable for $1 billion for a terminal constructed only at a cost of $275 million.

It will be recalled that the Philippine legal penal used as defense in the case pending with the ICSID documents pointing to anomalies in the bidding for the construction and management of the NAIA 3 which was won by Piatco. The Supreme Court nullified the award to Piatco due to anomalous changes in the bid documents and maneuvers made by the committee that favored the winning consortium.

Based on documents submitted by the lawyers of the government to the ICSID, including the Office of the Solicitor General represented by Asst. Solicitor General Nestor Ballacillo who was murdered recently, the investment operations of Fraport AG was attended by anomalies in violation of the laws of the host country and public international policy.

Piatco has refused to open its books of accounts for determination of expenses in the construction of NAIA 3 and to validate its claim of $565 million.

Points to ponder

International trade expert Jeremy Gatdula has raised very interesting points regarding the recently concluded ASEAN summit.

He notes that while the blueprint for an ASEAN charter and the call for an acceleration to achieve an ASEAN community could be good, we do have to remember one essential fact: what may be good for ASEAN may not necessarily be good for the Philippines .

The three countries most enthusiastic for greater integration - Malaysia , Thailand , and Singapore – have one thing in common: strong economies that keep getting stronger. The Philippines unfortunately is not in that league. Thus, by allowing ourselves to join in the ASEAN integration hoopla we may, in the end, be just used in preparing a feast that only others could enjoy.

Gatdula notes that the things we signed into last weekend with such enthusiasm are international agreements, meaning international obligations that we need to comply with. The question that we need to ask is: do we have the capabilities in meeting the demands of these obligations and, succeeding this, do we have the capabilities to attain the benefits that we expected to receive when we entered into these agreements?

The Heritage Foundation recently observed that the Philippines is relatively weak in business freedom, investment freedom, monetary freedom, property rights, and freedom from corruption. The government imposes both formal and non-formal barriers to foreign investment. Inflation is fairly high, and the government subsidizes the prices of several basic goods. The judicial system is weak and subject to extensive political influence. Organized crime is a major deterrent to the administration of justice, and bureaucratic corruption is extensive.

The Philippines’ utilization of ASEAN-CEPT benefits only amount to around 20 percent of our trade. This, Gatdula stressed, does not provide a pretty picture insofar as our ability to take advantage of international rules considering the fact that we have to concede something in order to qualify for those benefits. Note that ASEAN is not even the biggest destination of our exports. With regard to garments for example, ASEAN only amounts to perhaps half of one percent. Around 80 percent goes to the US, with substantial exports going to Japan and the EC as well.

Gatdula suggests that the Philippines should instead focus its attention on the WTO and the present Doha Round. There is still a small chance for the Round to be successfully concluded within the next few months. Failing that, he advocates building up our institutions: creating a Philippine Trade Representative Office, legislating a competition policy law, and amending some of our trade remedy laws, developing a more consistent economic and trade policy, among others.

He observes that one of the things he found baffling about the ASEAN Summit is that our government was enthusiastically lauding the steps towards more integration (which involves the quickening of the lessening of our tariffs) while at the same time, just several months back, our government embarked on a review of our tariff program (with such review resulting in the increase of tariffs).

This same lack of consistency can be found with regard to JPEPA: we rejected the Singapore issues in the WTO’s Doha Round (in effect saying no to the US, EC, and Japan), saying that such issues should be left to each countries’ individual discretion, and then we turn around and agree to Japan by including the Singapore issues in JPEPA.

Gatdula reminds all of us that the idea of a closer ASEAN integration (which apparently is to be modeled somewhat on the EC) would entail that we surrender - again - more of our sovereign rights. This, after all, is the point of a stronger ASEAN organization, with added calls by some quarters for an ASEAN parliament and common currency. Are we really prepared to accept the idea of Singaporean, Thai, Malaysian, Indonesian civil servants determining how we run our country? Are we prepared to surrender our prerogative in setting taxes and tariffs? Are we ready to give up the peso as our currency? I agree that these questions still need a lot of soul searching.

Not so hidden agenda

The Philippine Fuel Ethanol Alliance, a coalition promoting the agenda of energy independence by supporting local biofuels production and use, is spearheading a Biofuels Caravan along with partners Independent Philippine Petroleum Companies Association (IPPCA) and Coalition of Clean Cities in the Philippines (CCCP) from Feb. 4 to 13 this year.

The event, which celebrates the recent signing of the Biofuels Act of 2006 into law, primarily aims to raise awareness on the safety and benefits of using biofuels in vehicles. Most cars are fully compatible with up to 10 percent ethanol in the mixture. Today, every major automobile manufacturer recommends the use of fuels containing as much as 10 percent ethanol by volume and fully warranties its use in all of their vehicles. With the eventual implementation of the law, the Ethanol Alliance believes that the motoring public will have to be well-abreast with the technology and its benefits to vehicle performance and to the environment,

The Biofuels Caravan shall showcase vehicles running on ethanol-blended gasoline and coco-diesel additive staring from Northern Luzon and covering Tarlac, Lipa City, Batangas City, Iloilo City, Bacolod City, Cebu City, Cagayan de Oro City, Malaybalay in Bukidnon, and Davao City.

Apart from the city-wide motorcades, public forums will also be held to educate motorists and residents on the use of biofuel blends in their vehicles.

The Biofuels Caravan is one of the Ethanol Alliance’s projects for biofuels-focused information education and dissemination. The group also runs an online information website, www.bioethanol.com.ph, that showcases policy and market developments not only in the Philippines but among other Asian countries as well. The website recently had an extensive coverage of the successful ASEAN and East Asian Summits held in Cebu , which yielded a landmark energy cooperation pact for the development of biofuels in the region.


Chief News Editor: Sol Jose Vanzi

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