U.S.  EXEC:  PUBLIC  PERCEPTION  ON  RP  WRONG

MANILA, OCTOBER 1, 2007
(STAR) By Paolo Romero - The head of the US-ASEAN Business Council said the public perception on the Philippines does not match reality of the country’s economic growth.

Matthew Daley, president of the US-ASEAN Business Council made the observation during the roundtable discussion of the group with President Arroyo at the Waldorf Astoria Towers on Thursday in New York.

“The statistics tell the story: The Philippines is experiencing the highest average economic growth, the greatest job creation, the lowest inflation, and that is a remarkable accomplishment. And this, of course, happened under your leadership,” Daley said during the forum hosted by Martin Sullivan, president and chief executive officer (CEO) of AIG.

Composed of prominent business leaders, some of whom are listed in Fortune 1000, the US-ASEAN business called on Mrs. Arroyo to exchange views on business prospects in the Philippines during her two-day visit.

He said the US-ASEAN Business Council will send a business mission to the Philippines next month to further expand public “access between the Philippines and the American audience” on business and investment realities.

“We will be bringing this mission to Manila in October and we look forward to seeing you and many of your colleagues,” he said.

“I think one of the greatest challenges now is to focus (on public) perception to match with the reality of economic growth,” he said.

Daley said the business mission to the Philippines will strive to narrow the gap between public perception and the reality of the Philippines’ economic turnaround.

For his part, Sullivan told the President that the Council remains bullish on the Philippines. “There are great demands on your time… And I think you could see by the attendance today how the US business community sees the Philippines and its importance – not only individually, but also regionally and in a global scale.”

BIZ COLUMN: Broadband project had no budget DEMAND AND SUPPLY By Boo Chanco Monday, October 1, 2007

(STAR) In the course of the Senate hearing last Thursday, DOTC Assistant Secretary Lorenzo Formoso admitted that the Broadband project awarded to China’s ZTE Corp. had no budget. In fact, they did not even have a budget for a decent supplier-independent feasibility study. This is why, Formoso said, they did not have the specifications for the project needed to undertake a fair and transparent public bidding. An independent study would have allowed interested suppliers to make their bids on a level playing field.

What happened next? DOTC accepted the specifications given by ZTE. But because ZTE is claiming confidentiality of proprietary data, it is not possible to compare ZTE’s proposal with what is available in the market today. DOTC took the easy way of accepting ZTE’s say so even if they have the obligation to ask questions to protect our interest. Secretary Mendoza kept on saying that we do not have a choice because it is China’s call.

The bribery angle aside, what is wrong with this picture? First of all, the bureaucracy is effectively appropriating budgets for themselves, going around the exclusive mandate of Congress to appropriate funds under the Constitution. There was no budget for this large expenditure (P15.5 billion), yet DOTC signed a contract with ZTE for it. And because it is supposed to be an Executive Agreement, payment for the loan is automatically appropriated… no need for Congressional deliberation or action and the cost cannot be challenged as would normally happen in a transparent bidding.

I imagine that when the framers of the Constitution specified that public expenditures require Congressional approval, they must have given Congress the power to set priorities. Yet, in the ZTE-NBN case, Congress was obviously not consulted and therefore its consent was not obtained before DOTC signed a contract worth P15.5 billion. Congress is being presented with a fait accompli with DOTC thumbing its nose on the legislature because DOTC effectively automatically appropriated funds to pay the loan. That’s plainly usurpation of congressional power and prerogatives.

I see a violation of the Constitution here, at least even in the spirit of the Constitution that calls for transparency and public debate before money from the National Treasury can be committed. I also see a need to reconsider the provision of the Procurement Law that supposedly exempts contracts like the ZTE-NBN deal from public bidding.

If what DOTC and even the DOJ are saying is correct, then there is a big gaping hole in the Procurement Law that ought to be plugged. This exception to the rule on transparency is being abused, having been invoked on big projects like Northrail, NBN and CyberEd among others. The bureaucracy, having seen this loophole, is fast making transparency and open bidding the exception rather than the rule.

If Congress will allow this transgression on their right to appropriate even a single centavo before bureaucrats can commit to spend it, we might as well abolish Congress and save us billions of pesos in the process. Congressmen should feel bad that they have to fight tooth and nail to have funds appropriated in the budget for every road, bridge and schoolhouse in their district, yet here is DOTC waltzing away with ZTE to the tune of a P15.5-billion project with no sweat.

I realize it is easy for anyone to be lost in the details revealed in the course of those marathon hearings on the ZTE deal but here is one detail screaming loud and clear: DOTC admitted there was no budget for the broadband project yet it signed a contract that commits P15.5 billion of our money in the National Treasury without congressional action and no transparent bidding. Tama ba naman yan?

Executive privilege

There is one other thing I don’t get. Romy Neri said Chairman Abalos attempted to bribe him. Neri also said he reported it to Ate Glue who told him not to accept. Then he claimed executive privilege on the last part which is about what Ate Glue told him and what Ate Glue did about the ZTE deal anyway. I thought Neri nailed Ate Glue already, whether he likes it or not, whether he realizes it or not.

We all know NEDA, chaired by the President, approved the damn contract. Note that Neri signed a letter on April 20 nominating the ZTE proposal for the NBN project even after he reported the bribe offer to Ate Glue. Then, Ate Glue flew the next day to Hainan, China to witness the signing of the supply agreement she knew was tainted, between ZTE and her government. The ZTE contract must have been real important to her because she left the bedside of the just operated FG to do that. She should have just backed off.

I don’t know what else lawyers want. But can’t we make a good enough presumption that Ate Glue knew the contract was dirty but at the very least, still allowed NEDA to approve it? If you are a reasonable person, what else do we have to establish? That’s smoking gun enough for me.

After Romy Neri disclosed that he told Ate Glue about the bribe offer, invoking Executive Privilege can no longer protect the President. The story is out of the bag. Ate Glue did enough things that established her part of the whole thing. The debate on Executive Privilege is just so much legal quibbling.

Kapitolyo

Thus far, it seems the subprime credit crisis in the US has not affected the Philippine real estate market. It could affect it, of course, in as much as it is money from overseas Pinoys that’s pushing the demand side of the market. Pinoys in the US, in particular, are sensitive to conditions in the US credit market.

New-homes sales in the US tumbled in August to the lowest level in seven years, a stark sign that the credit crunch is getting worse. A lot of the demand for high end condos here could evaporate if the US-based Pinoys decide they have to cut down in the light of conditions in the American economy. It also doesn’t help that the dollar now buys less pesos. Even BPO investors might think twice.

Why all the hype that the sector is stronger than ever? The local real estate industry needs all the optimism they can muster. They are committed to more and more projects … be it residential condos, commercial rentals or even simple call center type buildings. Will there be takers once these projects are ready?

In the Pasig Ortigas area, Rizal Governor Jun Ynares told us last week at the Tuesday Club that the Kapitolyo area will soon be redeveloped. I understand the 10-hectare area is about to be returned to the Ortigas group that originally donated the property. A new Rizal Provincial Capitol will be built in Antipolo.

The Rizal provincial government got a good deal with the Ortigas group. Not only will the Ortigases build the new capitol in Antipolo, they will also pay the Rizal provincial government a billion pesos and allow them to retain a hectare in the present Kapitolyo in Pasig where the Rizal government has put up sports facilities.

I understand that the Ortigases and the Ayala group will jointly develop the Pasig site. This high end urban development project should be good news for the City of Pasig in terms of local government revenues.


Chief News Editor: Sol Jose Vanzi

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