Duterte’s economic appointees

Talking to business executives and entrepreneurs leads me to conclude they are, in general, quite happy about the economic managers President Duterte has appointed.

Folks seem happy and reassured with Finance Secretary Sonny Dominguez, Economic Planning Secretay Ernie Pernia and Transport Secretary Art Tugade.

Budget Secretary Ben Diokno also gets high marks from the business community as someone who knows his business and can be trusted to look after the public interest.

There are, however, questions being raised, quietly for now, about the quality of some appointments at the sub-Cabinet level. The recent appointment of RJ Jacinto as presidential adviser on economic affairs and information communications  technology with the rank of undersecretary raised a lot of eyebrows.

All of a sudden, social media is blooming with posts about Mr. Jacinto’s past. A sister of RJ recalled a family feud. Two of Mr. Duterte’s most loyal and noisiest original supporters, Jose Alejandrino and PhilStar columnist Carmen Pedrosa raised serious questions about RJ’s appointment.

In the business community, as well as in the business academe, there were a lot of heads shaking with RJ’s appointment. After all, RJ does not have a stellar reputation as a business manager. He inherited a family corporation and lost it all plus more. One comment I heard: RJ should stick to retro jam sessions for senior citizens.

Why is RJ influential with Duterte? Some say Duterte is paying him back for creating a campaign jingle for him. My impression of RJ from personal encounters is that he is a good salesman who can charm even Duterte into buying the Jones Bridge.

But the way I see it, the position RJ got appointed to is almost irrelevant. He is obviously an influential member of the bulong brigade which every president has. He can have his way, have top access, position or no position.

Fears have been expressed RJ is the typical rent-seeker from the local elite who does not hesitate to use influence to advance his business interests. Hopefully, RJ does not use his closeness to Mr. Duterte to get business concessions the way he did during the FVR watch.

Guys like Sonny Dominguez and Ernie Pernia must always keep a watchful eye on RJ’s plans. After all, it is these Cabinet members who can advice and protect the president from any attempt at old fashioned rent seeking.

While the appointment of the new BIR commissioner Cesar Dulay has been received well, the appointment of a deputy commissioner raised a hell of a lot of eyebrows. Lawyer Lanee Cui-David isn’t exactly a household name, but her being a former lawyer of businesswoman Janet Lim-Napoles made a lot of people wonder: Why her?

David has announced her resignation from the law firm that handles the Napoles cases, but the suspicion remains. After all, Mrs. Napoles and family face a number of tax evasion cases. One comment I heard, “sa dami ng qualified for the job, why take a risk on someone with a Napoles history? Maski papaano may pinagsamahan, may utang na loob.”

Then there is the appointment of an Ayala executive as transportation undersecretary for railroads. Noel Kintanar’s appointment reeks with conflict of interest as he will decide or make recommendations on issues involving Ayala projects he once led.

I asked Sec. Tugade about it and he reassured me it is alright because in the end, he will approve or disapprove Mr. Kintanar’s recommendations. But the conflict of interest remains. In basketball, yung player biglang naging referee after the halftime break.

It will be recalled Mr. Kintanar led a demand that government pay some P7.5 billion as compensation for government’s supposed failure to comply with contractual obligations regarding the LRT-1 Cavite extension... a few weeks after contract signing.

Then Sec. Jun Abaya agreed and tried to get the Budget department to set aside funds to pay for “penalties” to the LRT1 extension contractor even before the project could break ground and operations transferred to them.

Worse, Sec. Jun Abaya also asked for the release of P500 million for the government “blocked account” that would pay for future penalties to LRMC.

As I wrote in a previous column, did Abaya knowingly draft and sign a contract that smelled of collusion? It was Kintanar who was representing the consortium when the demand was made and the one who strongly insisted on it.

The LRMC, composed of Metro Pacific Investments Corp. (MPIC), Ayala Corporation, and Macquarie Infrastructure Holdings (Phil.), is the consortium which won the P65 billion LRT-1 public-private partnership project to build and operate the LRT-1 line extension from Baclaran, Manila to Bacoor, Cavite.

It was so strange and suspicious that Manuel V. Pangilinan, chairman of Metro Pacific Investments Corporation (MPIC), the lead company in LRMC, told Interaksyon he had no idea where the alleged claims came from, especially since the LRMC was being pointed to as the claimant.

LRMC president Jesus Francisco explained in no uncertain words that when the demand was made, there was no turnover yet, no full assessment, no claim. Mr. Francisco said that making any claim even before the turnover was premature because they had not yet been able to see the full condition of the 30-year-old LRT1 system.

The premature claim made by the team of Kintanar made it look like government will bankroll the project from the start with a P7.5 billion bonanza before the private consortium invests a centavo. If this is so, that’s not a Public Private Partnership but pure elitist rent seeking. Ginigisa ang taxpayer sa sariling mantika.

Indeed, Pangilinan stressed the consortium must take commercial risks in that venture, that there was no sovereign guarantee made by the government to the LRMC. “There’s no fixed guarantee, for example, 12 percent. No, this is not a guaranteed return… There’s no such thing,” he said.

Knowledgeable sources told me that unfortunately, MVP was kept in the dark by the Ayala group led by Kintanar.  Competent as we may presume Kintanar to be, it is difficult to trust him to look out for the public interest with a very recent record like that.

And yes, with an Ayala boy recommending or making the decision on the common station, the SM guys may as well just give up. The P200 million they paid DOTC way back in the Arroyo era is lost for good.

Indeed, when I last asked a top official of SM, I got the impression they have given up. They are now trying to convince themselves they can agree on a deal with Ayala and put the common station right in between SM North EDSA and Trinoma.

Well, a compromise just might as well happen and happen fast. The public interest was not served by the long delay. The Aquino era DOTC wasted six years doing nothing to solve the impasse.

In the meantime, they disregarded the safety and convenience of thousands of MRT/LRT riders who must go down at the Roosevelt LRT station and take a tricycle for a few hundred meters to connect with the MRT.

As for the appointment of Rudy Salalima as the first secretary of the Department of Information and Communication Technology, a lot of eyes were seen rolling as it was announced or confirmed on social media by of all entities, Globe.

Rudy, a Duterte San Beda Law classmate, is a very competent lawyer I worked with at BayanTel and who later joined Globe. He has to be extremely careful he won’t end up as the poster boy of regulatory capture. It is bad enough NTC is seen as such. His first public speech last Monday sounds like he is still a private telco lawyer.

Maybe, what the Duterte administration needs badly is an honest to goodness vetting of potential appointments. I can say we trust the president and are still cheering him on. But he has to be careful about some of the company he keeps. Some business folks are as dangerous to the national interest as drug lords.

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco