MANILA, Philippines — The back-to-back reviews of government contracts with the private sector won’t hurt investor confidence in the Philippines, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Monday.
“If you’re a businessman, you’re looking for where you’ll make money,” Diokno told ANC Television. “And if you invest in the Philippines, you’ll make a lot of money.”
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Since December last year, President Rodrigo Duterte has berated the Ayala-led Manila Water Company Inc. and Pangilinan-led Maynilad Water Services Inc. and threatened to jail their owners for supposedly forging water contracts with “onerous” provisions.
The Metropolitan Waterworks and Sewerage System, the Philippines’ water regulator, has rescinded the 15-year extension of the water concession deals, derailing the two utilities’ long-term plans.
Earlier this month, Duterte told the two companies to accept the new water contracts prepared by the government or risk having their concession deals terminated.
Last week, the Duterte administration escalated its attack against businesses, particularly the Ayalas, and announced it will “probe” the lease agreement between the University of the Philippines Diliman and Ayala Land Inc. for the development of the UP-Ayala Land Technohub along Commonwealth Avenue.
The Department of Finance also last week said it would terminate an “onerous” land deal between Chevron Philippines Inc. (formerly Caltex Philippines) and one of the subsidiaries of state-run National Development Co.
Analysts and business leaders have warned that Duterte’s vitriol against some of the country’s biggest companies could turn off foreign investors at a time more infrastructure projects heavily depend on private funding and as job-generating foreign investments continue to drop.
Socioeconomic Planning Secretary Ernesto Pernia told reporters last week that credit rating agencies and businessmen have expressed concern over the government's moves, saying that “these matters are very sensitive.”
Amid the recent developments, Diokno said he is still confident that the Philippines will bag a credit rating upgrade soon.
Editor's Note: Manuel V. Pangilinan, the chairman of Maynilad, is also chief executive of PLDT and of TV5. A unit under PLDT's media conglomerate has a majority stake in Philstar Global Corp., which runs Philstar.com. This article was independently produced following editorial guidelines.