Aquino’s plan upholds discredited development model

The PDP gives disproportionate stress on public-private partnerships (PPP) as if, the group said, these will substantially address the country’s underdevelopment troubles

The Aquino administration has formally released the Philippine Development Plan (PDP) 2011-2016, but research group IBON says the plan poses serious problems for the economy as it insists on a discredited development model.

According to IBON the central problem with the PDP, government’s economic blueprint for the next six years, is that it dogmatically stays on the course of ‘free market’ policies despite the country’s negative experience with such measures, especially in the last two decades.

The PDP gives disproportionate stress on public-private partnerships (PPP) as if, the group said, these will substantially address the country’s underdevelopment troubles. Even more than previous development plans, Aquino’s PDP aggressively promotes the idea that encouraging private profit is the surest and most effective way to advancing the people’s welfare.

This is most sharply seen in how the Aquino administration has adopted PPPs as a major strategy which maintains that the private sector should be supported as it performs the functions of government more efficiently. Among the new measures to attract private sector involvement in public goods and services are so-called regulatory risk guarantees – or essentially public guarantees of private profits, said IBON.

As it is, the NEDA has already proposed that the implementing rules and regulations (IRR) for the Build-Operate-Transfer (BOT) law (R.A. No. 6957, as amended by R.A. No. 7718) be amended such that “[government will] ensure that the project proponent recovers the difference [between] tolls, fees, rentals and other charges [under the contract] and the amount approved by the regulator”.

It is clear how big firms will benefit from guaranteed profits (for those entering PPPs), improved infrastructure and perhaps reduced costs of doing business, but it is uncertain how the huge majority of Filipinos will gain from the PDP. The country’s poor development experience under free market policies points to the need for a radical overhaul of socioeconomic policies, and not a development plan with a retrogressive character such as Aquino’s PDP. (end)

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