Level playing field under a Duterte presidency

President-elect Rodrigo Duterte’s assurances that he will “really level the playing field” is welcome news to businessmen who are hopeful that inconsistent and wishy-washy policies will soon become a thing of the past. Many are also counting on the incoming administration to end the practice of flouting contracts and agreements with private investors, especially with Duterte’s pronouncement that he wants to stop the abuse of temporary restraining orders that prevent the implementation of (fully vetted) government projects.

One of the complaints among current and potential investors is the uncertainty when it comes to our judicial system, with the perception that certain judges allow themselves (or the bench) to be used to favor a particular party in corporate cases or disputes. One such example is Cathay Pacific (CX) that has been doing business in the country for over 50 years but now finds itself getting repeatedly “bullied” in court by its local cargo contractor, People’s Air Cargo or Paircargo.

In 2004, Cathay Pacific wanted to obtain the services of another cargo handler but was prevented by Paircargo that went to court, claiming its contract with the airline was valid until 2007. The local court sided with Paircargo and issued a writ of injunction, ordering both parties to maintain the status quo while the case is being tried. The airline appealed the decision but as usual, the case dragged on.

When 2007 came, Paircargo went to court claiming its contract has been extended for another 10 years, and its position was upheld once again by the same court. CX elevated the case to the Supreme Court but knowing how slowly the wheels of justice turn in this country, it agreed to mediation proceedings, with both parties coming to an agreement in 2012 to extend the contract until March 2016. Early this year, CX held a bidding for a new handling contract with Paircargo also joining. But when the latter lost, it alleged that the bidding was not fair and went running to the same court – which not surprisingly issued a temporary restraining order. All this has taken its toll on the Hong Kong-based airline that is mulling the possibility of government-to-government talks to highlight the legal bullying it has been getting.

Local and foreign investors are hopeful that the incoming government will honor agreements and abide by the decision of arbitral courts, among them the group of Manny Pangilinan that has filed several arbitration cases in international courts due to the refusal of regulatory agencies to honor contractual obligations.

In 2013, Maynilad Water filed an arbitration case at the International Chamber of Commerce’s international Court of Arbitration in Singapore because the Metropolitan Waterworks and Sewerage System disallowed the private concessionaire’s rate adjustment petition – which was part of the agreement when the government decided to privatize because of MWSS’s dismal failure in supplying Metro Manila residents with adequate and potable water. Worse, MWSS refused to heed the arbitral court’s decision granting the petition of Maynilad for a rate adjustment which would allow the concessionaire to recover its investment and further improve water distribution facilities.

The changing rules plus the government’s disrespect of decisions to implement arbitration rulings is leaving a sour note. As remarked by European Chamber of Commerce VP Henry Schumacher, “Why would companies get involved in business here?”

Manny Pangilinan said there should be a “clean up” because no business entity would want to be perpetually locked in a legal dispute with the government, referring to the other arbitration cases filed by the MVP-led Metro Pacific Investments Corp. that include the Manila North Tollways Corp. arbitration case filed in Geneva last April before the UN Commission on International Trade Law, and the Cavite Infrastructure Corp. arbitration case in New York to recover P877 million in foregone revenues.

Putting a conclusion to these numerous arbitration cases would send a positive signal to the business community here and abroad because it would allay fears over the uncertainty that businessmen have experienced under the current administration, several businessmen confided.

Thailand’s pathway to sustainable development

Analysts are predicting that Thailand’s economy will grow by more than 3.3 percent this year following a strong first quarter performance that registered the highest growth in the last three years. This is certainly a positive development in light of moves to promote Thailand’s sufficiency economy as an international model for development. The Thai Embassy is in fact hosting a roundtable discussion on the topic of “Sufficiency Economy: A Pathway to Sustainable Development” on June 9 at the SGV Caseroom of the Asian Institute of Management in Makati. The event, which is in collaboration with the AIM and the Philippine-Thai Cultural Organization, also commemorates the 70th anniversary of King Bhumibol Adulyadej’s accession to the throne.

According to Thai Ambassador Thanatip Upatising, “sufficiency economy” is a philosophy that was conceived and developed by the king both as a way of life and as an approach to sustainable development. This has been at the core of Thailand’s development policy for over four decades, with its strength resting on three pillars — moderation, reasonableness and self-immunity.

As explained by the ambassador, “Sufficiency economy aims to replace economic exploitation with balanced, stable and sustainable economic growth. Under the Philosophy principle, a strong foundation and strength must be built from within to withstand external shocks and ensure sustainable development.”

As a universal concept, it can be applied to any sector of society and can also serve as a guiding principle for an individual, a family, a community or a nation. It must be emphasized however that this is not a ready-made development model or a one-size fits all solution. Rather, the underlying pillars can be tailored and applied to any sector or individual that takes into consideration differing needs and specific conditions.

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