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CIVIL-SOCIETY groups urged the government to stop its
efforts to privatize any more of its assets and
renegotiate canceled loans to prevent the country from
paying any more debts, particularly to the Asian
Development Bank (ADB).
The
Philippine Working Group (PWG) on the ADB, an umbrella
organization of local nongovernment organizations, also
called on the ADB to stop being a “profiteer” and an
agent in the privatization of the energy and grain
sectors in the country.
Freedom
from Debt Coalition (FDC) secretary-general Milo
Tanchuling said during a briefing that the government
must stop privatizing assets and instead strengthen its
institutions. Based on the Long Term Framework Strategy
of the ADB, it was clear, he said, that the bank is more
interested in making profits rather than being an agent
of change in the region.
Tanchuling said the ADB intends to increase its lending
to private-sector participants by as much as 50 percent
starting next year. He added that this is backed up by
the fact that the ADB considers lending to the private
sector among its top five priorities.
He said
this does not bode well for social-service projects and
would only increase the venues where the ADB will profit
even more. A case in point, Tanchuling said, was the
Masinloc coal-fired power plant.
Besides
earning interest from the previous loan obtained by the
government from the ADB for the plant which taxpayers
are still paying today, the bank will also be
“profiting” from the $930-million loan taken out by AES
Corp., which won in the bid to operate Masinloc,
according to Tanchuling.
“Our
problem on the rising electricity rates today is the
result of the ADB’s solution yesterday. First, they
funded the construction of Masinloc in the mid 1990s.
Then the bank pushed the government to sell Masinloc but
the sale failed, at first, due to the lack of power
purchase agreements (PPAs) with distribution utilities
and big-end users. The sale was only consummated
recently after AES Corp. acquired the 660-megawatt (MW)
plant in Masinloc at $930 million, with the help of the
National Power Corp. securing 265-MW PPAs for the new
owner and with the $200-million loan from ADB,”
Tanchuling explained in a statement.
Meanwhile, the group also said that continuing to pay
canceled loans for failed projects like the ADB-funded
Grains Sector Development Program (GSDP) would only add
to the country’s financial burden.
The
group said although the government canceled the GSDP in
2003, the government continues to pay for some $36.6
million worth of loans it used for project design,
feasibility studies and payment for consultants hired
before the cancellation of the loan.
The GSDP
was to be funded by a $100-million policy loan and a
$75-million investment loan from the ADB. Upon
cancellation, the government returned $70 million of the
policy loan and $68.4 million of the investment loan.
At the
same time, the group urged the government to strengthen
and reorganize the National Food Authority (NFA). By
strengthening the NFA, the government would be able to
increase production and not become dependent on imports.
The PWG
said that while it was true that the NFA was losing
millions of pesos due to heavy importation of rice, the
group also said these “losses” should not be deemed a
liability to the government rather than an investment.
The NGOs
believe that subsidizing the country’s food needs,
particularly on rice and corn, are part of the mandate
of the NFA. Any funds used to achieve food security must
not be considered a loss but an investment.
With the
current situation, Tanchuling said it was understandable
that the country is experiencing a difficult time
importing its rice needs. But privatizing the NFA, the
group said, would not be the appropriate move for the
government to take.
Tanchuling said that in Asia, the Philippines and
Indonesia are the only countries experiencing the
biggest problems when it comes to rice sufficiency. Both
countries are big importers of rice and often rely on
China and Vietnam to supply their rice needs. |
