A question of effectiveness at NEDA

It must now be said.  There are serious bottlenecks in the public-private partnership program of the Aquino administration. And one laggard is the National Economic & Development Authority (NEDA), which is charged with drawing up the program, setting the rules and evaluating the key projects that will be put up for competitive bidding among interested investors.

Back in September 9, 2010, after just two months in office, President Aquino issued Executive Order No.8 , which reorganized the Build-Operate and Transfer (BOT) Center into the Public-Private Partnership (PPP) Center, and transferred it from the Department of Trade and Industry (DTI) to the NEDA.

Since that historic issuance, there has been much hype in the media about how the PPP would be used to deliver public infrastructure and public services in the country. NEDA Director-General Cayetano Paderanga Jr. boldly declared that PPP would optimize private sector participation in the development program of the government.

So far, nothing much has moved forward. All government line agencies have been directed to establish their own PPP units, but few projects have gotten off the talking stage .Only the MRT and Northrail projects -- projects under the previous administration --have stirred to life.

The broad program has yet to take shape. Local and international investors interested in the PPP are complaining that there is nothing up to now for them to sink their teeth or money into. There is no strategic action plan.

Now, after all the enthusiasm for PPP at the start of the Aquino presidency, interest may be waning and turning into skepticism. Soon, President Aquino will be completing his first year in office.

The president’s approval ratings are falling because the people – his boss – don’t see solid achievements that can enable them to say that they are better off today than they were a year ago.

Management guru Peter Drucker famously said: “Without effectiveness, there are only dreams.”

PPP could have delivered what the people are looking for. But without effective managers on top of the PPP program, we have only the rhetoric – and not the infrastructure, and the jobs.

Test of performance

It is being said in business circles that the nation should worry about leadership in the NEDA today because Secretary Paderanga is an economist; and not a management man by training. He will be hard put to manage the process of converting the grand vision of the PPP into an effective program for economic transformation.

I have written the chairman of the Commission on Appointments to register my opposition to the appointment of Paderanga as Director-General of NEDA and Secretary of Economic Planning. Also known as “the chief economist of government” – this post is critical to the present and future of our country, and anyone who aspires to this office must meet the highest standards of  competence and integrity. I felt I would be remiss in my civic duties if I did not come forward and bring to the attention of the CA what I personally know about Paderanga’s record and fitness for the office.

Here are the pertinent points I relayed to the CA in my brief on Paderanga:

First, from year 2000 to 2007, I was chairman of CIBI Information, Inc. (CIBI) at the same time that Paderanga was chief executive officer of the company. His stint as CEO of CIBI was marked by major lapses and failures in management. Under his watch, the company failed to remit to the government, for the years 2004, 2005 and 2006 the amount of Php 2,694,494.25 in value-added tax, expanded withholding tax, and withholding tax on compensation.  The company paid penalties amounting to Php 1,304,801.78. 

Mr. Paderanga did not disclose to the Board that the legal consultant he hired was his brother-in-law. When the relationship was exposed, Mr. Paderanga hastily volunteered to shoulder part of the consultant’s monthly compensation.

Serious questions were raised about the books of CIBI during his stint. In its review of the company’s financial statements, SGV & Co found it necessary to restate and correct accounting entries under Mr. Paderanga’s management.

To defend his record at CIBI, Mr. Paderanga has tried to depict the company as having hemorrhaging losses. This is belied by what happened to the company after he left in 2007. In 2008 and 2009, the company reported a net income of P2,811,171, and P8,206,299 respectively.

Second, I reported that while he was CEO of CIBI, he also contracted to serve as CEO to two other companies namely: the Philippine Stock Exchange (PSE) and the PNOC Development and Management Corporation.

One columnist has described Paderanga’s exploits as a case of “corporate bigamy”. He said “yes” to no less than three corporations. 

Because of his three jobs, Paderanga could not perform his duties and responsibilities in all three.  He did not report to work regularly, while enjoying full compensation and privileges. At the PSE, he was dismissed as President, just six months after his appointment – the shortest stint in PSE’s history.

These problems are not ordinary problems of transparency.  They raise grave questions of fidelity to one’s office, questions of conflict of interest, and failure to observe fundamental laws like paying taxes. Above all, they raise the question of trust, which is the coin of effective public service and sound corporate management 

If the President declared war on former Ombudsman Merceditas Gutierrez because of her alleged lapses in office; he should in fairness also probe the shortcomings of Paderanga and other Cabinet members similarly challenged.

Ms. Gutierrez was forced to resign her constitutional office. With Paderanga’s erratic record, I submit that the CA should reject his appointment as NEDA head. Since he did not follow the straight and narrow path as a manager in the private sector, he should not preside over the economic fortunes of the nation in our public sector.