Aquino legacy: Promises, promises, promises

By Dean dela Paz 

The first promise was when Benigno Aquino III, still then a new president and still enjoying his political honeymoon, complete with his newly draped attendant mantle of trust, had boldly told businessmen across the country, then taking off from a 7.3-percent gross domestic product (GDP) growth during the last year of the previous administration, would henceforth be “open for business.” 

For those spellbound, that first promise was quickly broken. Right there on the starting block, the Aquino economy immediately tripped over its own feet, as GDP quickly crashed to recessionary lows as a direct consequence of a deliberate halt to major infrastructure spending that would have validated the “open for business” declaration.

While global economic forces would kick productivity up and the GDP statistic would eventually improve, inclusive growth remained elusive, as infrastructure spending remained anemic to the misfortune of foreign investors, public-private partnership (PPP) enthusiasts and the public that would later bear the full brunt of the failed initiatives.

The severe anemia would pervade throughout, save for this year when elections loom, compelling some substantive physical structures behind those billboards of long-unproductive candidates. As anemic as were the promises, so were the cobwebs cloyed around the PPP.

Aquino thought that he was prepared. And so did the gullible. Prior to the pomp and pageantry that accompanied the launch of the PPP program, long hours were expended in a small office in Malacañang, where the crusted build, operate and transfer (BOT) business model was redefined and otherwise coiffured to look like a sparklingly new and mascaraed debutante.

It now seems like a bald-faced lie, a broken promise, at the very least, initializing a litany of more broken promises to come. While admittedly certain favored business entities close to the political powers-that-be had reaped the benefits of the subsequent growth in domestic productivity, they were few, as there remain larger majority who’ve struggled through Aquino’s governance, albeit ironically, because they were among the first to heed Aquino’s call through the failed PPP.

The inherent flaws in the PPP DNA lie in its political gene, where these must necessarily be part of its make-up despite what professionalism, competence, capital and efficiency are infused from a corporate parent. In a highly charged political environment such as ours, these genetic downsides are further enhanced, if not aggressively catalyzed, and these end up overwhelming what offspring are spawned from a partnership that would eventually seem as if it might have been forged in hell.

Political tenure is limited and far too brief for even the most prolific project to show substantial returns on investments. Payback might be better prospects, but even that might be nearly impossible, given the bureaucratic processes the PPP passes through, albeit in our model, those are some of the areas thoughtfully abbreviated.

Unfortunately, reality trumps the promise. Note inherent flaws seen in the few PPP projects that have broken through the bureaucratic sieve, but have not gone far beyond the promises they started with. Arrayed against the recent investment of a major global financial institution in a domestic bank, plus the likelihood of another waiting in the wings, compels us to view the PPP through the lenses of a banker prospecting and sizing up both broken promises and their fulfillment when a whole new set of government officials take over this year.

Allow us a direct quote from a Maybank ATR Kim Eng report released recently:

“PPP projects, both prospective and those awarded, have been wrecked by controversy. Some of the more prominent examples are contractually agreed toll-road rate hikes that have not been given when scheduled, water-concession agreements being reinterpreted, and government deliverables on a hospital-construction project unduly delayed to the extent that the private-sector proponent returned the project to the government.”

In each, government reneged. And there lies the PPP’s fatal flaw. It’s promises, promises, promises.