Group slams Aquino’s privatization drive


MANILA — Greed for profit, not goals of efficiency.

Groups under the banner of the Stop Privatization Alliance and the Confederation for the Unity, Recognition, and Advancement of Government Employees (COURAGE) held a protest last July 18 at the foot of Mendiola bridge to denounce what they said was the Benigno Aquino III administration’s “mad rush” to privatize various agencies and departments that provide important services to the public.

The protest was supported mainly by employees and their unions from the National Food Authority (NFA), the National Housing Authority (NHA), the Department of Agriculture (DA) and its attached agencies, and the Department of Environment and Natural Resources (DENR), the Department of Agrarian Reform (DAR), the Metropolitan Manila Development Agency (MMDA) and the National Printing Office (NPO).

Courage vice-president Santiago Dasmarinas said the Aquino administration’s determination to impose full-scale privatization of the bureaucracy proves that it is no different from the previous government under ex-president Gloria Macapagal-Arroyo.

“Time and again we have seen the destructive effects of privatization on social services. When the government privatized the Metropolitan Waterworks and Sewerage System in 1998, it promised that water services in the National Capital Region (NCR) and areas covered by the MWSS would improve. More than a decade later, everyone knows that services have actually deteriorated in the sense that water is more expensive, and services remain inacessible in many areas,” he said.

He also pointed out that the privatization of formerly government-owned corporations including the Philippine Airlines and the Philippine National Bank (PNB) has resulted in losses in the said companies. Services, he also said, did not improve.

“The argument that privatization is equal to improving efficiency is not true. What we see is the government washing its hands of its mandated responsibility to provide efficient service to the public through a tightly-run, incorruptible bureaucracy; it’s selling off public assets to the private sector at the lowest bid, and all at the expense of the public good. Privatization means poor services for the public, mass employee lay-offs, on the one hand; but big profits for business interests,”he said.

Dasmarinas said that what was very noticeable about the Aquino government’s privatization scheme was how it is being packaged and the haste with which it is being implemented.

“The Aquino government is pushing for full privatization via public-private partnership schemes (PPP), and it is mobilizing its allies in both the Senate and House to rush priority privatization measures,” he said.

The Aquino government has included among its priority measures the privatization of the water and housing sectors. In the Lower House, lawmakers allied with Malacañang are hastening the passage of measures on the decoupling (separation of training and regulatory functions) of the National Food Authority (NFA); the creation of a Department of Housing and Urban Development, which will put an end to the government’s socialized housing program; the corporatization of public hospitals; and the abolition/merging of agencies such as the DA, the DAR and the DENR dubbed as the “Convergence Initiative Program” by its proponents led by Quezon Rep. Wilfredo Enverga.

The merging of the DA, DAR and the DENR is being supported by the World Bank (WB). The global finance institution has already offered technical assistance to ensure the success of the merger. Santiago Dasmariñas, also of the National Federation of Employees’ Associations of the Department of Agriculture (NAFEDA), has said that if the convergence measure is enacted into law, it will mean job displacements for the employees of the three agencies.

“It’s the public who will suffer most from privatization. The government will use taxpayers money to build infrastructure, but it’s private corporations and entities that will directly profit from the sale of the same buildings, facilities, and expertise. Many PPP projects are also heavily funded using foreign loans, including official development assistance (ODA). Most of the time they do not require equity from private contractors. Even as Aquino says his government will not shell out a single peso to fund PPPs, the reality is that government would assume the risk of the foreign debt and pass on the burden to the people through taxes. Also, if Aquino’s privatization scheme is allowed to succeed, one-fourth of the bureaucracy rank and file will be laid off, or some 420,000 government employees,” Dasmarinas said.

Private corporations make money from PPPs

Activist researcher and writer Arnold Padilla in an article said that Aquino is paving the way for private corporations to take over and make money through PPP deals in infrastructure development in energy, telecommunications, transport, and water and storage. In the last three decades, only a handful of families have been making a killing by buying out formerly government-owned and controlled corporations. They include the Ayala family ($10.2 billion in investment commitments from 1984 to 2009); Lopez ($7.1 billion); Pangilinan ($5.3 billion); Razon ($3.2 billion); Aboitiz ($2.8 billion); Ang/Cojuangco of SMC ($2.6 billion); and Consunji ($1.1 billion).

“Expectedly, they are the same families that are bagging PPP contracts under the current regime. The Ayalas and its Spanish partner, for instance, cornered the P1.9-billion ($45 million) Daang Hari – SLEx link road project. Meanwhile, the Ayala family is also competing with the Ang/Cojuangco group, Pangilinan and Consunji and their respective foreign partners for the P60-billio($1.42 billion) LRT Line 1 extension project. PPP projects oppress the poor not only through higher user fees. To give way to PPP projects, tens of thousands of urban poor families are also being displaced from their communities,” Padilla wrote.

Finally Padilla said that Aquino’s PPPs are neither progressive nor creative as he announced it to be during his first State of the Nation Address (SONA).

“They are simply a continuation of the neoliberal policy pushed by the IMF-World Bank and implemented by his predecessors including his mother former president Cory Aquino. PPPs are simply a mode of privatization implemented through the build-operate-and-transfer (BOT) and other similar arrangements between the government and big private corporations,” he said. “Aquino’s promotion of PPPs and privatization only reinforces the view that his government is incapable of introducing new policies that will reverse the old pro-business, pro-market neoliberal policies of the past administrations, including the Arroyo administration,” he said. (

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