State Owe-nership: Privatization, PPP and the People



The problem: train cars which barely have enough room to accommodate the 560 thousand commuters it has to cater to everyday, ticket booth lines stretching as long as the rail road tracks themselves, trains unprecedentedly stopping for indefinite periods of time in the middle of nowehere, and dilapidated washrooms and other facilities.

The solution: privatization.

Last March, the Department of Transportation and Communications (DOTC) entered into a ten-year concession agreement with the AF Consortium of the conglomerates Metro Pacific Investment Corporations (MPIC) and Ayala Corporation who will build and implement the new single ticketing system for Metro Manila’s MRT and LRT lines. This is in spite of the dissent expressed by people’s organization opposing the privatization and commercialization of yet another one of the Metro Manila commuter’s main venues for transportation. But it seems as if the technocrats and bureacrats of the government have found a cop out in the debate: it’s simply not privatization.

While the relinquishing of duties performed by the government, in this case the MRT and LRT, have been before the Aquino administration justly referred to as privatization, the tide has shifted to referring to it as a form of Public-Private Partnership or PPP. And the distinction between these two terms, like the distinction between the Socialized Tuition Fee and Assistance Program (STFAP) and the new Socialized Tuition Scheme (STS), has been noted with emphasis by its proponents, but not its critics.

The rhetoric employed by the Philippine government in having private institutions running the delivery of basic services, such as water, electricity, health and transportation, is that it is not really privatization. Atty. Sherry Ann N. Austria, Director of Policy Formulation, Evaluation, and Monitoring Service (PFEMS) of the Public-Private Partnership Center, argues that while PPP indeed opens participation of private individuals and corporations, privatization is a matter of ownership. The heart of the argument is that since the government retains overall ownership of institutions subjected to PPP (except, the director notes, “in cases of Build-Own-and-Operate and Rehabilitate-Own-and-Operate contractual arrangements”), institutions are not essentially privatized. In the case of the Modernization of the Philippine Orthopedic Center (POC), one of the 72 hospitals ran by the Department of Health (DOH) to be turned over to private institutions, Austria writes that, “the POC is and will always remain as a government-owned hospital. It will however be built and operated by a private company who will bring in its vast expertise and resources to make POC a more reliable and efficient government hospital.”


Of course, the poor can always go to PGH.

By privatization, of course, advocates against PPP mean the encroachment of private and corporate interests in the exercise of government functions. As there is most often a trade-off between the just delivery of services provided by the government and the desire to maximize profit and minimize cost, the subjugation of public enterprises under the hands of private individuals is often discouraged. The core principle may be demostrated by simply pointing out that it does not matter if the institutions providing water, helath, electricity and transportation do not get profit from the delivery of such services in so far as such services are accessible and are of high quality.

The administration frames the argument as a matter of ownership and ownership alone. They portray the anti-PPP advocates as if they are obsessed by who owns the institutions which provide basic services and attempt to demolish their arguments by ensuring (badly) that the State still owns such institutions. But the problem is not who owns the institutions, but who runs it and for whose interest.

Even if privatization and the PPP is, by some chance on earth, essentialy different, it has been admitted by the people behind PPP is that selling off public institutions to private institutions is included in the PPP. PPP and privatization, by their own definition, are only as different as a genus is different from the species under it, only the government views PPP as the genus and privatization the species and the opposition views it the other way.

Let us pause for a moment from animal science analogies and turn our attention back to the humanity of the matter. In a sad attempt to justify the surrendering of institutional independence of primary institutions to corporate interests, the government is willing to bend over and admit that for the longest time, they have been running State institutions to the ground and only private institutions know how to correct their mess. Whether it is because these institutions are “cash-stripped” as Director Austria described it, or that the quality of its service delivery has deteriorated at the expense of the people relying on it, privatization and/or PPP, whatever one may call it, may be considered an honest attempt to salvage basic services from inefficiency and ineffectiveness. Such an argument is welcome. And considering history, for example, in the case of electricity, privatization has done wonders in terms of efficiency and accessibility.

(c) TV5

MVP’s official mascot for Meralco. Criminals actually fear this guy because he charges them afterwards.

Wait a minute. There’s something wrong with that. Since 1992, state policy which fully privatized electricity has not only led to the highest power rate in Asia and the 5th highest electricity rate in the world, but also has failed to remove allegations of corruption and instances of failure of service delivery from the Filipino experience. And so not only did the public had to pay more in screwing light bulbs to light their homes, they also have been screwed over by the very people who light them. Power hikes are imposed without proper consultation and with devious justifications, as proved by the recent ruling on the attempted power hike, and public dissent is welcomed by threats of rotational brownouts. In the summer.

And so while we are suppressed by threats of hell and retribution, we are made to believe that giving even more power to private corporations and institutions are to our benefit. That it is empowering the people to become more involved in State processes. To that one can easily ask: which people is the government empowering? Surely it is not the anti-privatization activists whom they suppress. It is not even the people who are entitled to services they provide, whom they threaten with brown-outs, higher taxes and poor quality of service. PPP, privatization and overall commercialization of services empowers no one but the very people behind it: the government officials and technocrats obsessed with efficiency and progress in graphs and numbers while lacking regard for social justice, and the corporate lobbyists whom entice them with promises of greater revenue in exchange for political and economic influence, regardless of who reaps the benefits of such revenue.

As Scholars and the Nation’s conscience we are appalled and disgusted by such developments in policy and the practice of power. Yet we are not surprised. For even when we stand, even in our classrooms and in the offices nearby, we find that a similar attitude is honed: private interests before the community’s. Gain regardless of principle, for prestige and influence’s sake. If we are not wary and weary of these kinds of motivations for whatever we do, wherever we are, we may be so easily deceived and enthralled by vague illusions of “efficiency” and “development”, when we are built for more than that. We Scholars, and the People we represent, are meant for and are deserving of honor, excellence, justice and service.

(c) ABS-CBN News

This was actually a candid shot.


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