Creaky

We are at that time of the year when millions of Filipinos are on traveling mode. This is the week of greatest strain on our creaky infrastructure and greatest discomfort for our travelers.

Nowhere is the strain more evident than at the Ninoy Aquino International Airport (NAIA) where hundreds of thousands will converge over the next few days, elbowing for scare space. The NAIA gained notoriety for being repeatedly named the World’s Worst Airport the past few years.

The last announcement I monitored from the airport authorities concerns the reassignment of flights across the facility’s four disconnected terminals over the next few weeks. This is like moving chairs around the Titanic’s deck.

Until the sprawling new airport in Bulacan is commissioned, we will have to bear with the existing facility that has reached the limits of flights and passengers it can service. Unless some-thing truly innovative is done soon, this airport will be a bane rather than a boon.

Our transport authorities are determined to privatize NAIA operations as soon as possible. Transport Secretary Jaime Bautista reiterated this in a recent talk, announcing that government has tapped the Asian Development Bank to help find a suitable private operator for NAIA.

The privatization of NAIA operations and maintenance will take the form of a concession agreement. This will grant a private entity the right to operate and improve the facility over a fixed period. It will be responsible for investing in the airport’s rehabilitation leading to increasing the airport’s passenger capacity.

Privatizing the airport is a process that began years ago, with little progress to show.

In February 2018, former transport secretary Art Tugade received a proposal from a consortium of our largest corporations to rehabilitate the airport for P350 billion. The NAIA Consor-tium’s technical partner is Changi Airport International, operator of Singapore’s famed airport, consistently rated the world’s best the past years.

Soon after, however, a second group offered to rehabilitate the NAIA and challenged the bid, offering rehabilitation of the airport for less than half the cost estimate of the first consortium. The second bidder, Megawide-GMR, led the joint venture that upgraded the facilities and operation of the Mactan-Cebu International Airport (MCIA).

The onset of the pandemic, however, postponed all efforts to privatize management and operations of the NAIA – to the chagrin of air travelers using this decrepit facility.

The MCIA is a rare infrastructure accomplishment. The facility’s state-of-the-art Terminal 2 received the World Architecture Festival Award in 2019. Last February, the MCIA bagged the Routes Asia 2023 Award for the Under 5 Million Passenger Category.

In the four years since it was upgraded, the MCIA improved passenger traffic substantially. It is ready for a return to pre-pandemic passenger levels this year.

Both the MCIA and the Clark International Airport are under concession agreements with private operators. They are the two brightest lights in our air transport today. There is every reason to expect that shifting the NAIA to a public-private partnership similar to the two other airports will benefit our commuting public.

We have accumulated a respectable history of public-private partnerships. Among the most impressive are the expressways and skyways built with private sector capital to meet the most urgent transportation needs.

Imagine how even more congested our lives would have been had these public-private partnerships not been forged. Today, we can motor to Baguio from Manila in three hours instead of eight. San Miguel’s Skyway links the NLEX and the SLEX without adding traffic load on at-grade level city streets.

Public-private partnerships widen the door for investments to flow into our economy. It enables government to focus its resources on social services.

The DOTR will, hopefully, proceed with the NAIA’s privatization with a sense of urgency. If they do, our travelers might endure a much lighter calvary this time next year.

$10

Until last week, global oil prices were falling rather beautifully, coming down to a bit over $72 for a barrel of Brent crude. That raised hopes we could escape a global recession and nurse our economies to vitality.

A few days ago, the cartel of oil exporting countries surprised markets by cutting production by about 1.15 million barrels per day. The markets duly responded. The downward spiral in oil prices quickly shifted to an upward spike.

We see the effects of global oil pricing in our pump prices. After weeks of rollbacks, we will pay sharply more for gasoline today. As oil prices firm up, we can expect more price increases in the coming weeks.

Some analysts are estimating the production cutback could translate into a $10 increase per barrel of crude. Because of that, we can expect more price hikes in the coming weeks. Our commuters will not be cheering.

The anticipated spike in oil prices will feed into the elevated inflation rates the world’s central banks have been trying to tame through interest hikes for months. Elevated inflation will continue to hang heavily, making recession even more likely and recovery a lot less vibrant.

The US has been trying to convince the OPEC against cutting production – to no avail. The cutback will have to be seen as a failure for US economic diplomacy.

When crude oil prices were at their highest, the US began drawing from their strategic oil reserves. They did not refill their stores when prices softened, hoping to abet falling oil prices. Now she will have to refill her reserves at a higher cost regime.