GOVT TO WOO ABU DHABI INVESTORS FOR PPP / P-NOY ON FOOD PRICES?
MANILA, FEBRUARY 19, 2011 (STAR) By Ma. Elisa P. Osorio - The Philippines is planning to woo investors from Doha and Abu Dhabi to fuel investments in the government’s Public Private Partnership (PPP) program and industries in the Investment Priorities Plan (IPP).
In an interview with reporters, Board of Investments (BOI) managing head Cristino L. Panlilio said that he will be heading to Doha and Abu Dhabi to court investors in the mideast region.
Panlilio said that they are eyeing $1 billion each from Doha and Abu Dhabi. “We would like to solicit an equity fund from Abu Dhabi and the Qatar Investment authority,” he said.
“What we want from them is not hot money. This is not investment in the stock exchange. We would like them to invest in the PPP or the IPP,” Panlilio explained.
Earlier, the government said they are expecting P348.5 billion worth of investments in the power sector under the PPP.
Panlilio said that for 2012 and beyond, they are considering 43 new projects in the power sector with a combined worth of P348.5 billion.
Likewise, Panlilio said that there are already 28 projects that require P263.5 billion in investments that are up for competitive selection. He said that for 2012, 73 projects have been identified for PPP.
Meanwhile, the government is still hopeful that it would be able to bid out this year at least 10 projects under the PPP scheme.
Finance Secretary Cesar Purisima gave this assurance yesterday as he noted that the government is preparing the documents and proposals for the different projects to be bid out.
“We are confident that we will bid out at least 10 projects in 2011,” Purisima said.
He reiterated previous pronouncements that the government would no longer entertain unsolicited proposals as it might mean a repeat of the mistakes of previous administrations.
The Finance chief said that unsolicited proposals are more prone to sweetheart deals such as what happened in the past. Such deals, he said, have turned away investors. “We have to tap the expertise of the private sector,” Purisima said.
The Finance chief believes that what is important is to have the crucial infrastructure in place to be able to attract investments in the country and consequently, create job opportunities.
Purisima said the idea is to have better airports, roads and bridges so that the country would be more attractive to local and foreign investors.
A PPP is a contractual arrangement between government and the private sector to deliver public infrastructure and public services. It is being pushed by the Aquino administration so that it would have more funds for public health and education.
In November last year, the government launched its PPP summit to announce planned projects to potential investors.
Possible projects include linking the Manila-Cavite Coastal Road with the South Luzon Expressway.
The 27.5-kilometer expressway hopes to decongest the traffic in Cavite and provide access among the different economic zones covering the two areas.
For the Light Rail Transit, the Aquino administration hopes to bid out the privatization of LRT Line 1 operation and management.
Another project is the extension project of LRT 1, which involves the construction of an 11.7-kilometer extension, to be implemented from 2011 to 2015.
The government is also planning an extension of LRT Line 2 East under which there will be a four-kilometer railway system to be constructed during the period 2011 to 2014.
The Aquino administration hopes to create more fiscal space with the PPP initiatives. — With Iris Gonzales
Is P-Noy taking chances on food prices? DEMAND AND SUPPLY By Boo Chanco (The Philippine Star) Updated February 18, 2011 12:00 AM Comments (9) SHARE: facebook twitter yahoo! buzz Other social networks
According to World Bank chief Robert Zoellick last Tuesday, global food prices have reached “dangerous levels,” as he warned of the political implications that could bring. World Bank data showed higher food prices have pushed 44 million more people in developing countries into extreme poverty since June 2010. They already have to live on less than $1.25 a day, the WB pointed out.
Bloomberg reports: “Food and other commodity prices are on the rise and “that defines an inflationary trend,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. With prices rising 2.5 percent to three percent, “real wages are declining,” Silvia said.
“Real incomes are declining. People have less to spend on other items. It’s pretty broad base,” Bloomberg quotes Silva. And because food gets a bigger share in family expenditures in countries like ours, we can say most Filipinos are worse hit by this development.
“There is no room for complacency,” Zoellick told a conference call. It is also clear, Zoellick said, that recent food price rises are causing pain and suffering for poor people around the globe. I wrote the other week of a similar warning from the Food and Agriculture Organization (FAO). But why do I get the feeling our government isn’t getting the message?
We need to hear a coherent policy statement from P-Noy on how his administration is moving to address the challenges of a global food price inflation. We are hearing disjointed voices from senior officials on various aspects of the problem. We are therefore left in the dark and confused on how exactly they are working to assure food on our tables at affordable prices.
For example, some economic managers have announced a new policy that will see the demise of the National Food Authority and its subsidy function transferred to the DSWD. A week after, the NFA announced it was borrowing P6 billion to import rice even as the same agency also announced a drastic cut in the volumes they will import this year. No one is explaining why an agency that is supposed to be abolished being allowed to borrow P6 billion.
Then there is the Agriculture Secretary expressing disagreement to proposals calling for consolidation of farms so that our food growing can benefit from economies of scale. The Agri chief expressed preference to go on with the discredited Agrarian Reform law and just try to aggregate farms through a program with the Agrarian Reform dept and DENR called convergence.
No details however were given on this so-called convergence program beyond the suggestion that it will essentially use public lands and will not touch existing agricultural lands made uneconomic by agrarian reform. Needless to say, we have not heard from the Agri chief on how he plans to make sure food prices will be affordable for most of our people.
As the World Bank has pointed out, this food price inflation is hardest on the poor living in developing countries like ours. For them, the cost of food is over 50 percent of their consumer basket. Any increase in food costs severely impacts on their ability to feed themselves. “There is no silver bullet to resolving the potent combination of rising and volatile food prices,” Zoellick said, “but food security is now a global security issue.”
Rising food prices have increased the vulnerability of economies, particularly those that import a high share of their food and have limited capacity for government borrowing and spending. Of course in our case our economic managers will say we have good ability to borrow. But that does not mean we should not take steps to assure the country’s food supply while we still can.
“In the immediate term, it is important to ensure that further increases in poverty are curtailed by taking measures that calm jittery markets and by scaling up safety net and nutritional programs,” the World Bank said in the report, released Tuesday.
“Investments in raising environmentally sustainable agricultural productivity, better risk-management tools, less food intensive biofuel technologies, and climate change adaptation measures are all necessary over the medium term to mitigate the impact of expected food price volatility on the most vulnerable.”
A comment made in a discussion of the issue at the New York Times sums up the problem: “Feeding a growing world population with rising dietary expectations will demand ever greater production, especially if greater reserves are needed to provide security from weather disasters.
“Fortunately, while the planet may be running out of land, it’s not running out of potential to increase production of food and fiber. Crop yields in Ukraine, for example, are barely a third of those achieved regularly in the US.
“Realizing this potential will take investment that’s only now starting to flow into agriculture around the world. Higher prices help increase the flow of capital, not only for better seeds, fertilizers and machinery, but for the transportation and storage facilities needed to move farm products where and when they’re needed.”
In other words, we need an investment plan for our agricultural sector. Crafting this plan must be a priority if only because food is as basic as it gets. We need the best minds to help work on such a program. Unfortunately, food prices and food security are not even being seriously discussed in Congress, if at all. It isn’t a topic that the juveniles at the Palace are familiar with. And because those fat cats are in no danger of experiencing hunger, that explains their lack of interest in it.
Just because P-Noy and his boys are not feeling any heat from the public on this issue right now, they are making the dangerous assumption that they can keep this in the back burner. This is of course, a terrible mistake.
By the time the major dailies notice the problem and start landing it in the front pages it will probably be too late to mitigate the impact on our people and our political stability. What we need now is a serious discussion of our food production policies including agrarian reform. Then the proper steps should be taken including legislation.
P-Noy must not minimize the political implications of a serious food crisis. What is happening in the Middle East was as much ignited by hungry stomachs as it was by Twitter and Facebook. P-Noy cannot afford to take chances on this issue.
Going nowhere fast
I got this e-mail from a long time foreign resident.
I am totally in agreement with your article “We’re still going nowhere fast” of February 11. 2011. As a corporate lawyer I worked for 35 years in international business and, some 10 years in multi-billion investments abroad. We studied extremely carefully the legal set-up in each potential destination before sending out the first penny.
Everybody wishes the President good luck in his endeavors with the Public Private Partnership (PPP), as it will benefit all of us. However, nobody should forget, that the President’s excellent reputation and good intentions are not comparable with the picture the international investment community has of the Philippines.
Most probably all the potential investors will wait and see till the problems with NAIA 3, Shell Customs dispute and Laguna Bay dredging contract with BDZ Belgium are satisfactorily settled. Whatever guarantees this government gives to foreign investors, when they will be confronted with problems later-on with the legislative or the juridical branches; such papers are not very helpful.
Also the investors know the supremacy of the Supreme Court and, that the Aquino-tenure is only six years ending more or less at the same date when the ROI shall start. Hopefully, Edwin Lacierda will find a solution for said time frame and, explain to the potential investors and to their home guarantors (Export Credit Agencies) what’s happening when the Aquino-tenure ends in 2016.
Thanks for your very interesting articles, I am reading since five years, immediately after coming to the Philippines, with greatest interest.
Someone texted me this one.
Neri talks. Abalos goes to jail. GMA commits suicide. Gutierrez resigns. Lacson surrenders. FG goes…
Watch the reports now on Wish Ko Lang at Channel 7.
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