News that President Aquino was able to convince at least three Thai conglomerates to consider investing in the administration’s flagship Public-Private-Partnership (PPP) Program came as a breath of fresh air to an increasingly arid investment environment.

Days before that announcement, Indonesia was trumpeting a $10-billion investment from India’s Ambani Group—that country’s biggest private company with interests in power and oil refining, manufacturing, telecoms and a host of other concerns—which came on top of announced multibillion-dollar ventures between a number of Chinese companies and their Indonesian partners in mining, power and agribusiness. Those were unprecedented investment coups, especially in the case of Chinese companies that have heretofore avoided any huge foray into Indonesia, given the two countries’ past and the lingering anti-Chinese syndrome in many parts of that vast archipelago. But times are changing and so are the ways and practices of the past. Which is why it is imperative that the administration review posthaste its policies and strategies and, yes, resharpen its pencils before we are permanently consigned as the investments’ laggard this part of the world.

For if truth be told, we are definitely behind the curve as far as foreign investments are concerned. Total foreign direct investments (FDI) approved in the first quarter by our major investment promotion agencies declined by a whopping 52.8 percent to only P22 billion. If that is not a clear indication of how foreign investors view our situation I don’t know what is. It is good that local investors more than made up for that decrease by committing a total of P139.9 billion to various projects. That should be most welcome, especially if the committed funds are privately raised and put in place in the shortest possible time. We will even be more thankful if these investors are not about to make use (raid is how some have characterized this) of government financial institutions or government-issued papers to raise their capital only to haphazardly misuse these and then leave the Republic literally holding the empty bag. We have been through periods of “behest loans” and “behest projects” in the past we can no longer afford to have any of those this time around. Two-thirds of the committed FDI, (about P16.8 billion) went to manufacturing was 60-percent lower than last year’s total, the rest went to services and payments which, again, leaves much to be desired. Indeed, there are lots to do about our investment regime that even if the President’s only action is to tweak it toward real, not contrived, priority projects that can provide jobs and attract allied activities, such as tourism and resources processing, he shall have done right by his campaign promises. Just putting the house in order, so to speak, on the high-profile cases, such the German contractor Fraport and the Naia 3 project; the recently junked (was it finally cast off the table?) multi-billion-peso Laguna Lake Rehabilitation Project (LLRP) involving the Belgian contractor BGC, the country’s investment guarantee and financial services agencies, as well as a Franco-Belgian bank, BNP Paribas/Fortis; the Chinese-funded Northrail project; the questionable Philnico take over and, yes, bring a close to the decades-old Bataan Nuclear Power Plant saga, will open up the investment spigots.

Naia 3 and Laguna Lake

That the Ninoy Aquino International Airport (Naia) 3 and Laguna Lake projects have become the “stimulus test” on this administration’s resolve to play fair and square by the rules is unquestioned. No less than the German Embassy in Manila has reacted quite exasperatedly at the long-standing dispute over the terminal, which, by the way, the government has taken over by virtue of a Supreme Court decision some years back. “A fair and swift solution would be an encouraging signal for the international business community to engage in long term investments, such as the PPP,” was how the embassy in Manila reacted to the latest court ruling granting Piatco and its partner, Fraport, the sum of $175 million as “fair and just” compensation for constructing the airport. That diplomatic note was just the German government’s way of saying the court granted award was unacceptable, considering that the original billing was closer to $650 million (the reckoning price when the terminal was expropriated by government in 2002), a claim which may have gained currency after the arbitration court in Singapore noted that the Fraport/Piatco partnership was a “builder in good faith and standing.” The embassy also noted that Fraport was ready to sit down for a “negotiated” settlement even as the German company’s partner, Philippine International Air Terminals Co. (Piatco), has served notice that it will question the lower court’s decision before the Court of Appeals. How the administration will now react to this development can very well provide an inkling on how it views, if not values, foreign investors, as well as the goodwill and friendship of their countries of origin.

Which is what the Belgian contractor BGC also has been saying for almost a year now after the government unilaterally consigned its signed, sealed and delivered contract for the LLRP to the dustbins. Over that period, the BGC has been running around trying to get the administration to honor its commitments under the contract which, to all intents and purposes, was validly in place after going through the approval process as provided for by law. In fact, no less than Justice Secretary Leila de Lima officially advised that the contract was valid and in place, perhaps to the consternation of people within the administration who had all but shut out all possible avenues for a peaceable implementation or, if the administration feels otherwise, a proper withdrawal of its obligations. Well, the contractor finally got an advice some time back that the administration had decided to scrap the contract without as much as explaining and detailing the reasons for its doing so. Which now leaves government in danger of being haled to court, here and abroad, not to mention being dragged into the pits and before the international community as “unreliable and whimsical”’ in its ways. Again, like Naia 3 and Fraport, the administration still has the time to salvage the situation and restore its standing before investors and the international community. That is, if it wants to. The question is: would it rather be hailed to international arbitration and possibly pay up for the hassle it brought upon in itself than work out a peaceful resolution of the case?

The answer should be clear. In the meantime, it should brace up for the continued anxiety and problems that will continue to haunt it and our people as these two projects, which are decidedly meritorious and of utmost urgency, i.e., the full opening of a world-class terminal and the clearing and dredging, protection, stabilization and optimal utilization of the country’s biggest fresh water lake, especially at this time. The choices are well defined.

Northrail and BNPP

Finally, we are advised that the Chinese government and its companies are poised to take a second look at Manila now that the controversies surrounding China’s initial foray into the country are receding in the background. We are referring here to the NBN/ZTE deal, which is now being brought to light before the Sandiganbayan. If the reports are to be believed, it is getting clear that this case was really blown out of proportion and politicized no end by certain groups who had commercial as well as political axes to grind against the then-Arroyo administration as well as certain persons associated with that regime. Apparently, the Chinese have come to terms with the fallout from this undertaking and are now ready to step into the waters again. But first they would like to set straight the other pending incident, Northrail, over which we are told they have poured in excess of $500 million in funds to get it going. This matter should be looked into soon enough if we are to get into good standing with the Chinese as they continue with their investment drives worldwide and before the next generation of leaders step in. Again, we certainly hope the administration is on top of this situation so we can make sense of our continued PPP road shows in China and elsewhere.

Now, as to the BNPP, what needs to
be done, to my mind is for the administration to make up its mind what to do with the plant and, as a matter of justice, for the courts to finally rule on the decades-long case involving the person who assisted in building and completing this plant in accord with internationally accepted standards, Mr. Herminio Disini. It needs restating here that despite what happened at the Fukushima nuclear plant in Japan and earlier apprehensions about the efficacy of such plants, no serious objections have been heard either from governments, environmental groups and, of course, power industry folks about the need for these to meet the growing global demand for energy. In fact, what we have been hearing is that the nuclear option has become an even more urgent and viable solution to the problems associated with power generation. No less than the Chinese government has decided to accelerate the building of what experts say the Chinese “nuclear fleet” consisting of at least 10 nuclear plants to be strategically located in various parts of the country as it moves westward to open up its hinterlands to development. Indonesia is considering building up one while the Taiwanese, Koreans and, yes, Indians, are well, advanced to add more to their own “fleets.”