NAIA sale to pay debts

Amid the excitement over the successful privatization of NAIA’s rehab and operation, Finance Secretary Ralph Recto mused about the future of NAIA beyond the 15-year San Miguel concession period. He revived plans to sell NAIA assets as a property play and generate a few trillion pesos to help reduce the country’s debt.

Recto told reporters covering his confirmation hearing as Finance Secretary that the proposal to eventually monetize NAIA assets could be considered because SMC is building the New Manila International Airport in Bulacan and once the new airport takes off, there could be better use of NAIA assets. Land preparation at Bulacan is almost completed and that’s 70 percent of what must be done in the project timeline. Building the terminals and the runways should start early next year.

As I reported in my Dece. 11, 2023 column, I asked RSA, assuming he wins the NAIA bidding, what happens to NAIA after Bulacan becomes operational within the next three years? His quick reply was that he was open to giving NAIA back to the government so the Treasury can make even more money selling it as a property play. We didn’t go into the details of what happens to SMC investments at NAIA because I assumed that’s also been calculated in the bid and subject to negotiations when the time comes.

I am not even thinking of the proposal to build Sangley International Airport. The proponents still have to raise enough funding and they have to do reclamation in deep waters that will take too much time. Sangley is looking irrelevant even now. Sangley is dead in the water, so to speak.

The idea of monetizing NAIA assets is not new. Former Finance secretary Sonny Dominguez once entertained the idea of generating one-time gains for debt payments. Dominguez said that NAIA can potentially be a mixed-use development, a new BGC. Rep. Joey Salceda, chair of the House ways and means committee, also toyed with the same idea.

“It’s worth exploring moving forward. You can do many things. You can auction it like 25 hectares, and then another 25 so the value keeps on increasing,” Recto said.

But he clarified he is not saying they will do that but that they should just be thinking about it.

Recto said the value of the land should be more by the time they are ready to sell because of new infrastructure that will go to NAIA like the Metro Manila Subway. On the other hand, some experts are saying NAIA land may not be as valuable in ten to fifteen years because all those massive reclamation projects on Manila Bay may be done and coming into the market too.

Recto is correct to say they should be thinking of monetizing NAIA as a property play. By that, I hope he means that someone in government will now start thinking of selling NAIA not as raw land the way they did with BGC. Rather, this is our last chance to show the world that we have expert urban planners who know how to develop Metro Manila’s last large chunk of land into something more civilized than the BGC horror story.

The 646-hectare NAIA airport complex is roughly 2.5 times the size of BGC. Using a conservative price of P1 million/sqm is a whopping P6.46 trillion in potential revenue. Not enough to wipe out the P15 trillion national debt but still very significant.

NAIA should be sold as one whole pre-planned development with all the things a decent city needs including enough open space.  Urban open space is something almost totally neglected in this country. Yet open space provides direct benefits to human society through such processes as ground water storage, climate moderation, flood control, storm damage prevention, and air and water pollution abatement.

Open spaces provide opportunities to explore and experience nature, socialize and participate in health-boosting recreational activities. Think New York Central Park and the Golden Gate Park in San Francisco.

A new study published in the Journal of the Association of Environmental and Resource Economists found out that providing “enough open space, and that adding open space would increase land values and social well-being.” It urged a change in prevailing attitudes that often see “open space regarded as a luxury rather than a necessary public service.”

Our government must learn from the lessons that the BGC experience taught us. We cannot trust the property developers to do the right things because their focus is on their fiduciary responsibility for their shareholders or profits. It will be plainly stupid if once we are ready to privatize NAIA land, our clueless government will once again leave it to property developers to determine how all that land must be developed.

For one thing, we are already too crowded in Metro Manila and our government should start the move out of NCR to a new national government center. To pack development in every square meter of land as the private sector developers have done at BGC is a crime against the people. Let us do it right this time and keep greed out of the terms of reference for the bidding. The Treasury may not get as much as it otherwise could, but the government would have done the right thing for a change.

Boo Chanco’s email address is [email protected]. Follow him on X or Twitter @boochanco