BAYAN MUNA party-list group has urged the administration to stop subsidizing foreign and domestic corporations for their bad investments in state projects, arguing that the people should not pay for wrong business decisions.
Bayan Muna has been at the forefront of the campaign to end sovereign guarantees to foreign and local investors, insisting that businesses are expected to take risks and should not pass on their losses to the taxpayers, whether they are involved in public-private partnership (PPP) projects or other deals, like the build-operate-transfer (BOT), or those supported by official development assistance (ODA).
The group has also scored the blatant favoritism of the Philippine Statistics Authority (PSA), which granted the US information-technology company Unisys two extensions in the first phase of the PSA computerization program for the civil registry system (CRS).
In September 2016 the PSA signed a P1.59-billion agreement with Unisys for the 12-year Phase 2 project of CRS in a failed bidding in which only Unisys participated.
Absorbing business risks is not the taxpayer’s patriotic duty, said Party-list Rep. Carlos Isagani Zarate of Bayan Muna, “since all participants in PPP projects and even those that offer unsolicited projects should know their risks and must be ready to confront or overcome them.”
A check with the 2017 General Appropriations Act (GAA) revealed that the Duterte administration has set aside P30 billion in unprogrammed appropriations for the Risk Management Program (RMP), the same amount carried in the final year of the Aquino administration.
RMP is included in the Special Purpose Funds (SPFs) and is nearly 50 percent of the total of P60.5 billion.
Overall, the programmed and unprogrammed SPFs amounted to P1.406 trillion, or about 42 percent of the 2017 GAA. Zarate, along with their colleagues in the Makabayan Bloc, has called for an end to the unjust and unconstitutional pampering of foreign and local corporations through the RMP.
The Bayan Muna lawmaker said a sovereign guarantee is a form of assurance from the government to private companies entering partnership projects with the state, with the government paying for “losses” incurred when contract obligations are not met.
“Palpak po kasi itong mga existing PPP projects, nandito ang problema. Marami po sa listahan dito sa PPP naka-embed iyong sovereign guarantee. At the end of the day sasaluhin na naman ng mamamayang Pilipino ang papasuking obligasyon ng private companies,” Zarate said.
He added that the alleged letter then-Transportation and Communications Secretary Joseph Emilio A. Abaya supposedly sent to the Office of the President in 2015 exposed the sinister nature of sovereign guarantees.
In the supposed letter, Abaya asked the Palace to pay the P7.5 billion to the Ayala-Metro Pacific consortium Light Rail Manila Corp. (LRMC) as a form of penalty for the Light Rail Transit Authority’s alleged failure to comply with obligations under the contract for the operation of Light Rail Transit 1.
Abaya had denied sending such a letter but the Office of the President (OP) was strangely silent on the sovereign guarantee provision for the PPP contract with LRMC.
Bayan Muna also lashed out at the sovereign guarantees granted to the Maynilad and Manila Water Services by the government under letters of undertaking, even as the Metropolitan Waterworks and Sewerage System (MWSS) continued to regulate the two water concessionaires serving the National Capital Region (NCR) and adjacent areas.
On August 12, 2015, Bayan Muna filed a 58-page petition for review of the concession agreements and sovereign guarantees extended to Maynilad and Manila Water before the Supreme Court (SC), which still has to resolve the case.
Maynilad and Manila Water invoked such sovereign guarantees in seeking reimbursements for losses in operating their concessions, with Manila Water demanding payment of P70 billion and Maynilad asking for P3.5 billion.
Worse, disputes between the MWSS and the water concessionaires were permitted to be resolved by the International Court of Arbitration (ICA) created by the International Chamber of Commerce in 1923 under the concession agreements (CAs).
The two water concessionaires are supposed to be Philippine corporations operating public utilities and subject to the 1987 Constitution and Philippine laws, Bayan Muna argued in its August 12, 2015, petition for certiorari against the concession agreements and the sovereign guarantees.
Both companies also continue to pass on to the consumers their corporate income taxes, despite a clear ruling from the Supreme Court (SC) in 2003 prohibiting them from doing so.
Columnist Satur Ocampo also wrote on October 10, 2015, that “at least 17 firms, mostly foreign-owned or joint ventures with Filipino firms, have similar sovereign guarantees in their contracts to undertake government projects.”
One of these is Universal LRT Corp. Ltd., the concessionaire-contractor for the MRT 7, a mass rail-transit system that will run from San Jose del Monte City in Bulacan to Quezon City.
The other projects that benefited from sovereign guarantees are the 1998 Mindanao coal-fired power plant undertaken by San Roque Power Corp., with the consortium of Marubeni Corp., Sithe Philippines Holdings and Italia-Thai Development Public Co. Ltd., and the 1999 Caliraya-Botocan-Kalayaan power plant, contracted by Industrias Metalurgicas Pescamona Sociedad Anopnima, or Iimpsa.
Bayan Muna has been at the forefront of the campaign to end sovereign guarantees to foreign and local investors, insisting that businesses are expected to take risks and should not pass on their losses to the taxpayers, whether they are involved in public-private partnership (PPP) projects or other deals, like the build-operate-transfer (BOT), or those supported by official development assistance (ODA).
The group has also scored the blatant favoritism of the Philippine Statistics Authority (PSA), which granted the US information-technology company Unisys two extensions in the first phase of the PSA computerization program for the civil registry system (CRS).
In September 2016 the PSA signed a P1.59-billion agreement with Unisys for the 12-year Phase 2 project of CRS in a failed bidding in which only Unisys participated.
Absorbing business risks is not the taxpayer’s patriotic duty, said Party-list Rep. Carlos Isagani Zarate of Bayan Muna, “since all participants in PPP projects and even those that offer unsolicited projects should know their risks and must be ready to confront or overcome them.”
A check with the 2017 General Appropriations Act (GAA) revealed that the Duterte administration has set aside P30 billion in unprogrammed appropriations for the Risk Management Program (RMP), the same amount carried in the final year of the Aquino administration.
RMP is included in the Special Purpose Funds (SPFs) and is nearly 50 percent of the total of P60.5 billion.
Overall, the programmed and unprogrammed SPFs amounted to P1.406 trillion, or about 42 percent of the 2017 GAA. Zarate, along with their colleagues in the Makabayan Bloc, has called for an end to the unjust and unconstitutional pampering of foreign and local corporations through the RMP.
The Bayan Muna lawmaker said a sovereign guarantee is a form of assurance from the government to private companies entering partnership projects with the state, with the government paying for “losses” incurred when contract obligations are not met.
“Palpak po kasi itong mga existing PPP projects, nandito ang problema. Marami po sa listahan dito sa PPP naka-embed iyong sovereign guarantee. At the end of the day sasaluhin na naman ng mamamayang Pilipino ang papasuking obligasyon ng private companies,” Zarate said.
He added that the alleged letter then-Transportation and Communications Secretary Joseph Emilio A. Abaya supposedly sent to the Office of the President in 2015 exposed the sinister nature of sovereign guarantees.
In the supposed letter, Abaya asked the Palace to pay the P7.5 billion to the Ayala-Metro Pacific consortium Light Rail Manila Corp. (LRMC) as a form of penalty for the Light Rail Transit Authority’s alleged failure to comply with obligations under the contract for the operation of Light Rail Transit 1.
Abaya had denied sending such a letter but the Office of the President (OP) was strangely silent on the sovereign guarantee provision for the PPP contract with LRMC.
Bayan Muna also lashed out at the sovereign guarantees granted to the Maynilad and Manila Water Services by the government under letters of undertaking, even as the Metropolitan Waterworks and Sewerage System (MWSS) continued to regulate the two water concessionaires serving the National Capital Region (NCR) and adjacent areas.
On August 12, 2015, Bayan Muna filed a 58-page petition for review of the concession agreements and sovereign guarantees extended to Maynilad and Manila Water before the Supreme Court (SC), which still has to resolve the case.
Maynilad and Manila Water invoked such sovereign guarantees in seeking reimbursements for losses in operating their concessions, with Manila Water demanding payment of P70 billion and Maynilad asking for P3.5 billion.
Worse, disputes between the MWSS and the water concessionaires were permitted to be resolved by the International Court of Arbitration (ICA) created by the International Chamber of Commerce in 1923 under the concession agreements (CAs).
The two water concessionaires are supposed to be Philippine corporations operating public utilities and subject to the 1987 Constitution and Philippine laws, Bayan Muna argued in its August 12, 2015, petition for certiorari against the concession agreements and the sovereign guarantees.
Both companies also continue to pass on to the consumers their corporate income taxes, despite a clear ruling from the Supreme Court (SC) in 2003 prohibiting them from doing so.
Columnist Satur Ocampo also wrote on October 10, 2015, that “at least 17 firms, mostly foreign-owned or joint ventures with Filipino firms, have similar sovereign guarantees in their contracts to undertake government projects.”
One of these is Universal LRT Corp. Ltd., the concessionaire-contractor for the MRT 7, a mass rail-transit system that will run from San Jose del Monte City in Bulacan to Quezon City.
The other projects that benefited from sovereign guarantees are the 1998 Mindanao coal-fired power plant undertaken by San Roque Power Corp., with the consortium of Marubeni Corp., Sithe Philippines Holdings and Italia-Thai Development Public Co. Ltd., and the 1999 Caliraya-Botocan-Kalayaan power plant, contracted by Industrias Metalurgicas Pescamona Sociedad Anopnima, or Iimpsa.
