Media Release 24 January 2011 The problem is privatization, not only specific provisions – KMU “It is the privatization of social services per se that is the problem, not only the particular provi…

Media Release
24 January 2011

The problem is privatization, not only specific provisions – KMU

“It is the privatization of social services per se that is the problem, not only the particular provisions in the privatization deals.”

This was labor center Kilusang Mayo Uno’s reaction to San Miguel Corporation president Ramon S. Ang’s call to President Benigno Aquino III to stop giving state guarantees to all projects under the government’s Public-Private Partnership program, saying railroads and toll ways in particular should be considered social services and not business projects.

Ang called on President Aquino to ensure that the bidding process for privatization projects be transparent, that winning bidders provide the best service at the lowest cost, and that winning bidders finish their projects within three to five years. He also said that infrastructure projects are viable and investors will not be needing state guarantees to earn profits.

“Providing state guarantees is only the extreme form of the basic problem with privatization, which is private corporations profiting from what are supposed to be social services being availed by the Filipino workers and people. Whether privatization projects entail state guarantees or not, it will still be the Filipino workers and people who will shoulder the cost of the social service that will be privatized,” said Elmer “Bong” Labog, KMU chairperson.

“The basic point is that railroads and toll ways should be considered as social services by the government, and not business ventures available to private corporations. With state subsidy, social services should be available at the lowest possible cost to the Filipino people – and that won’t happen under privatization because the latter will by definition ensure profits for private corporations,” Labog added.

SMC being boxed out?

The labor center also speculated on SMC’s motive in speaking out about ensuring a “fair and square” bidding process for the government’s privatization projects. SMC is said to be eyeing the ownership of the MRT and LRT train systems which the Aquino government is intent on privatizing.  

“Such statements from the SMC may indicate that it is sensing some horse trading in the Aquino government’s privatization projects, that it is being boxed out of the competition. That is also in the nature of privatization: it has been used by ruling regimes to reward their closest allies among the elites,” Labog said.

Aside from SMC, which is owned by business tycoon Danding Cojuangco, Manny Pangilinan’s Metro Pacific Investments Corp. and the Lopezes’ Philippine Holdings Inc., are also said to be interested in owning the said train systems.