PUNCHLINE
Ike
Seneres
I was surprised to find out that the public
broadcasting systems in the United States of America (USA) is owned by the
people, and not by the government. In line with that, I also found out that the
American government is prohibited by law from broadcasting within the USA, and
perhaps that is the reason why the Voice of America (VOA) is only broadcasting
overseas. Perhaps the underlying principle to that is that in a real democracy,
the government should not have a bigger voice than the people.
Some sectors would
argue that government has no business to go into business, because business of
any kind should be the exclusive domain of the private sector. When I was
Director General of the National Computer Center (NCC), I grappled with this
issue because I was also the concurrent head of the National Computer Institute
(NCI). Even at that time, the private sector was already offering computer
courses that were similar to, and therefore were competing with the offerings
of the NCI.
At the outset, I
considered the issue that the NCI should not compete with the private sector.
Eventually, I decided that the NCI could continue offering computer courses,
for as long as these are better and are cheaper when compared to the offerings
of the private sector. Although I am a firm believer in free market economics,
I also reckoned with the fact that some private computer school offerings are
terribly overpriced, even if these are relatively of poorer quality.
Somehow, I found
comfort in the thought that by offering better and cheaper courses, the NCI
could set the higher standards for the private sector to follow.
Perhaps not too many people know that the
Build-Operate-Transfer (BOT) scheme was actually invented in the Philippines,
and it is also here where some of the best examples of BOT projects could also
be found.
On top of that success
however, the government has improved the BOT scheme by turning it into the
Public-Private Partnership (PPP) program. Even if the name has changed, the
principle is still the same, and that is to invite the investments of private
companies in public projects.
As I understand it,
government procurement rules would allow either joint venture agreements (JVAs)
or joint venture companies (JVCs) in partnership with the private sector. A JVA
would be like going steady with a girlfriend, whereas a JVC would be like
getting married to a wife. In other words, a JVA is temporary, whereas a JVC is
permanent, at least until the end of its corporate life. In a manner of
speaking, a JVA is similar to a Memorandum of Agreement (MOA), wherein the
contracting parties retain their own juridical entities, and no new corporate
entities are formed.
On the other hand, a JVC would result in the
formation of a new corporate entity that is distinct from that of the
contracting parties. Under government auditing rules, JVCs that are majority
owned by private sector investors are exempt from the jurisdiction of the
Commission on Audit (COA). That should not cause us to worry, because the legal
fiction is that these JVCs are subject to the principles of corporate
governance, a set of rules that are probably more rigid than what are required
by the government. Perhaps it could be said that the burden of watching over
the JVCs would shift from the COA to the newly formed PPP Program Center that
is now under the National Economic Development Authority (NEDA).
Comparing JVAs and
JVCs, I would prefer the latter, provided that these are majority owned by the
private sector. Even if I would still say that government has no business to be
in business, JVCs that are majority owned by the private sector would be a good
compromise, especially if their investments are into sectors that are socially
oriented, and the investments needed are beyond what the government could
afford.
This is a win-win
solution, because the private investors could earn their profits, whereas the
government could deliver its services.
Under the Local Government Code (LGC), local
government units (LGUs) are now considered as corporations, and they could
invest or go into contracts just like a private corporation. That being the
case, the next best thing that could happen is for LGUs to go into JVCs with
private corporations under the new PPP rules. This is really a huge window of
opportunity for the LGUs, because the private corporations not only have the
money, they also have the technology to build and deliver the public services
that are much needed at the local level.
As it is now, it seems
that many of the approved PPP projects are still public works related. My wish
is that the national government agencies (NGAs) and LGUs would consider
inviting private corporations to invite more investments in other projects that
would give them the opportunity to make money, while also creating the means to
deliver public services in cooperation with the government. The list of
possible projects could go on and on, because there are many public needs that
are already known, except that we do not know where to get the money to make it
happen.
Among all other needs,
it would be good to invest in tourism, because of the tremendous capability of
that industry to generate new employment. As I understand it, there are new
forms of tourism that could be developed, such as educational tourism,
environmental tourism, historical tourism and medical tourism. All over the
Philippines, there are many places that could be developed as tourist
attractions, and that would be good for the LGUs.
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