Too late

The realization must have hit like a thunderbolt. The sustained decline in our rate of growth is due principally to the collapse in public spending since this administration took over.

I have recently pointed out in this space the Aquino administration’s apparent obsession to hoard cash rather than duly deploy the national budget to support economic growth. That propensity to hoard extends to impounding funds allocated to fill up vacancies in the public sector.

Compounding government spending are the odd and arbitrary cancellations of several large projects involving official development assistance from European countries. These include the Belgian-assisted project to dredge the Laguna de Bay and the French-assisted program to build retracting ro-ro ports that will help link isolated island economies to the mainstream. The cancellations will likely end up in international arbitration courts and force us to pay damages in the billions.

Further compounding the underspending is the fact that not one of the identified Public-Private Partnership (PPP) projects has been successfully negotiated, not to mention actually initiated. In a recent policy speech before Makati businessmen, DOTC Secretary Mar Roxas indicated a policy shift away from the PPP and back to the old model of ODA-driven project financing.

The long-standing problem with ODA-driven projects is that the national government has always been unable to raise the required counterpart funding to get these projects moving. Roxas gave no indication about how this matter might be resolved. He made no mention, too, of the fact that projects undertaken by government agencies take too long to gestate. This is the reason, in the first place, why the BOT framework (the essential legal frame for the PPP) was legislated into place.

This week, the Aquino administration surprised everybody by unveiling a stimulus spending package amounting to P72 billion. The money will be used for infrastructure and poverty alleviation.

In his appearance before foreign correspondents yesterday, the President indicated that the P72 billion stimulus fund will be spent this year. That must have raised eyebrows in the crowd. We hope the President realizes that we effectively have only a little more than 8 weeks left to get anything going this year.

That is a tough sprint for this administration to win, considering that it allowed a year and a half to pass without any major project advancing to shovel-ready status.

To make matters worse, public works projects with completed engineering designs and ready contracts from the previous administration were put on hold “for review.” By this time, the negotiated contract costs should have changed dramatically and a flurry of re-bidding needs to happen literally in a matter of days for the stimulus money to rescue our economic growth before the year closes.

The President’s men must have neglected looking at the calendar. It is October. We are well into the fourth quarter.

It is odd enough that a stimulus package for the year was announced so late in the year. It is ridiculous that so much money is intended to be injected into the economy with so few working days left and so little ready shovel-ready projects on deck.

This package might not be too little but definitely too late to save a year lost.

Responsible mining

Communist rebels torched tens of millions worth of mining equipment in Surigao last week. The incident underscores the vulnerability of mining operations in the country to extortion and armed attacks. Government could only offer relief in terms of hiring more paramilitary personnel to help secure the mines.

If the three severely damaged mining enterprises choose to shut down in the face of more harassment from the rebels, over 5,000 workers directly hired by these enterprises will lose their jobs. In one of the poorest regions of the country, it will not be easy for these workers to seek new jobs.

The communist rebels will not, of course, admit to extortion being the motive behind this costly raid on the mining sites. They posture as guardians of the environment and mouth the very same lines peddled by dogmatic environmental groups. The utterances of these dogmatic groups provide pretext for criminal elements to prey upon mining investments. That will not be healthy for our economic development.

Mining is key to our nation’s progress. We are blessed with large amounts of minerals, including gold, silver, copper, nickel and manganese. These minerals will bring no benefit unless they are extracted. Extracting and processing minerals out of ore requires large investment in modern technologies. Those investments will not be made if the risks to the enterprises are not mitigated.

Mining is known to have caused thriving cities to be born. Since the mineral deposits are often in the most remote areas, the industry has the potential of helping relieve poverty from where incidence is most severe.

To be sure, there are responsible NGOs who take a balanced view of the opportunities and hazards of extractive industries. An example of a responsible NGO is the Foundation for the Philippine Environment, financed by a debt-for-nature swap with the US government. This foundation helps in supporting communities work for conserving our ecological heritage as well as enforcing existing laws on minerals exploitation.

There are irresponsible NGOs, as well, such as the Alyansa Tigil Mina that, by its very name, opposes any and all mining activities. They polarize public opinion and, intentionally or not, encourage the sort of justification the communist rebels avail of for their wanton destruction.

It is possible, and necessary, to have a sober national dialogue on how to use our natural resources to liberate our people from poverty. That requires a reasonable posture among all parties.