Balance in synergies: Ensuring effective public-private partnership

Z-FACTOR - Joe Zaldarriaga - The Philippine Star
Balance in synergies:  Ensuring effective public-private partnership
A drone shot captures the picturesque view of Laguna Lake in the background of the Ortigas Business District on March 28, 2024.
Michael Varcas / The Philippine STAR

Partnerships between the government and the private sector have long been a cornerstone of economic growth, both in the Philippines and globally. Remarkably, the Philippines is the first country in Asia to institutionalize private sector participation in infrastructure and development projects. Reports from the Asian Development Bank showed that over the past three decades, public-private partnerships (PPPs) have been integral to the Philippines’ strategy for achieving inclusive growth and advancing its development agenda.

Earlier this year, the government finalized the implementing rules and regulations (IRR) of the Public-Private Partnership (PPP) Code. This significant development is expected to bolster PPP initiatives by ensuring a stable and predictable policy environment, and consequently, fueling high-quality social and development infrastructure projects.

National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said that this is a key component of President Marcos’ transformation agenda under the Philippine Development Plan (PDP) 2023-2028, particularly in light of the “tight fiscal space.”

These collaborations leverage the strengths of each sector: the government crafts policies and regulations, while the private sector largely drives innovation and economic enterprise. The success of these PPPs relies on fostering a balanced and mutually respectful synergy between both parties.

Disruptions to this synergy can lead to significant negative consequences. This inevitably creates an imbalance that becomes a roadblock, ultimately burdening the Filipino people.

A recent example is the controversy involving the state-owned Public Estates Authority Tollways Corp. (PEATC) and its attempt to take over the management and operation of the Manila-Cavite Expressway (CAVITEX) from Cavitex Infrastructure Corp. (CIC).

PEATC’s officer-in-charge, Dioscoro Esteban Jr., initiated legal action to remove CIC’s management rights. This move has sparked legal battles and raised concerns about the stability of such partnerships.

Earlier, Esteban formalized efforts to remove CIC from the operations of CAVITEX by filing a petition for a writ of mandamus before the Court of Appeals, seeking a full transfer of CAVITEX operations, as well as toll collection to PEATC. He also asked the court to require the CIC to transfer CAVITEX operation contract services to the PEATC. This move has been met with strong resistance from CIC.

CIC responded by filing before the Ombudsman a criminal complaint against Esteban for violations including anti-graft and corruption laws, perjury, usurpation of authority, and slander. Furthermore, CIC questioned Esteban’s use of private lawyers instead of the Office of the Government Corporate Counsel (OGCC), highlighting procedural irregularities. OGCC is the entity is in charge of safeguarding the legal interests of government-owned and/or -controlled corporations, such as the PEATC.

The judiciary will ultimately decide the legal merits of this case, but this issue made me realize that there exists a fundamental issue: the poor appreciation of the critical role of the private sector in public service.

The private sector brings invaluable expertise, resources, and technology, enhancing government initiatives for the public good and boosting the national economy.

When conflicts arise within public-private partnerships, takeovers should not be the default response. Such actions undermine the spirit of collaboration and can erode investor confidence, deterring future private sector engagement.

Instead, the government should focus on robust regulations and measures that allow the private sector to deliver public services effectively while ensuring compliance with regulations and remitting the correct fees to the state.

Encouraging private sector investment is integral to President Marcos’ 10-point economic agenda, which should guide all government offices. Deviating from this policy would not only harm the administration but also disadvantage the Filipino people.

Moving forward, it is crucial to recognize and preserve the effectiveness of public-private partnerships (PPPs). These collaborations are essential for delivering vital programs and projects that benefit the citizens. The private sector plays a pivotal role in the Philippines’ economy, serving as the driving force behind the nation’s long-term growth and development. Its indispensable contributions lay the foundations for a thriving economic future.

By maintaining a balanced and synergistic approach, the government and the private sector can continue to drive economic growth and enhance public welfare.

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