SM heiress asks government, private sector to unite for economic development

SM Group heiress Teresita Sy has asked both the government and the private sector to unite and do their share in the massive effort to build better infrastructures to improve basic services to the people and spur the development of the economy.

Sy, daughter of retail tycoon Henry Sy, made this pitch following the widespread devastation left by last week’s typhoon Milenyo across the country.

In a speech before the Government Infrastructure Forum Wednesday, Sy, vice-chairman of listed investment holding company SM Investments Corp., appealed to the business community to support the government’s massive infrastructure program involving transportation, communication, power and water projects.

"After last week’s typhoon, I think we all realized the consequence of infrastructures‚ breakdown, and were confronted by the fragility of the country’s infrastructures in the havoc wrought by typhoon Milenyo. Well, power supply, telecommunication, the information network, the transport system, potable water, were all affected. These, along with irrigation and sewerage are all vital to the continuing growth of commerce and industries, as well as improving our lives.

"Creating, expanding and ensuring a high quality of such facilities is logically the priority, if the country is to achieve higher growth. Infrastructure, as we all know, is an indispensable minimum," Sy said.

Sy said President Arroyo herself called the need for catching up on the infrastrastrure program which will not be undertaken by the National Government alone, but in cooperation with the private sector and local government.

"The private sector can be enticed to invest, if a fair return is possible. We see viable examples of this in telecommunications, urban water supply and toll highways," Sy said.

Sy said the local government should expend most of the taxes on infrastructures that will be used primarily by its constituents.

She also asked the national and local government to draw up clear and consistent rules regarding infrastructure projects. "If one looks back, some of the bad experiences of private sectors in infrastructures projects have stemmed either from lack of prioritizing by the government, or lack of clear rules. Sometimes, the government goes back on its plan or changes specifications. In some cases, different parts or branches of government do not see eye to eye and give conflicting signals about particular investments; while in others, political considerations and affiliations are allowed to distort infrastructures‚ priorities," Sy said.

"We need not always agree on details, but as long as we are broadminded enough to consider good ideas from wherever they originate, we can transcend our larger division, work together with each other, and be able to achieve national growth and fair returns for the private sectors," Sy said.

"The government sees the urgency of the infrastructures right now, and understands better than before, the immediate economic and social impact of these programs. So what better time than now to listen and look at these business opportunities," Sy added.

The Philippine government’s infrastructure program to be implemented for roads, rail systems, airports, ports, and other basic requirements is estimated to cost $7.2 billion in the next four years.

The private sector would be asked to bid for 18.39 percent of the total through "build-operate-transfer" or similar proposals, while state-run firms would spend 31.8 percent of the total cost of the program.

Rail projects will answer for 48 percent of the project cost with a light rail loop encircling metropolitan Manila.

By 2007, the government is estimated to have an "allocable amount" of P38 billion that may be used to finance infrastructure projects and other projects aimed at improving basic services to the people.

Of the P38 billion allocable amount expected to be available to the government by 2007, only P16.4 billion would be used as additional funding for infrastructure projects, while the rest will be used to augment the budgets of other priority projects like those aimed at improving health and education in the country.

The government, however, is expected to have at its disposal significantly bigger allocable amounts during the fiscal years of 2008 to 2010, with the expected growth in revenues due to higher taxes and more efficient revenue collection.