Free ourselves from the evil of Privatization!

Bekarmino Dabalos Saguing
Rome, Italy 19/02/2014

Currently, ther Philippine government has embarked on a privatization spree on prime services such as health services, the foremost example is that of the Philippine Orthopedic  Center (POC), claiming that the privatization of the hospital promises increased affordability and accessibility of health care.

In June 4, 2013, a lone bidder, the Megawide Construction Corporation-World Citi Corp consortium(Partly Owned by Henry Sy), submitted bid documents. Target construction starts by 2014, with completion by May 2016.

The government targets the improvement of hospital facilities by involving private investors through PPP. PPP is a central policy and solution announced during President Benigno Aquino III’s 1st State of the Nation Address in 2010. Other hospitals up for PPP include the Research Institute for Tropical Medicine (RITM), San Lazaro Hospital, Dr, Jose Fabella Memorial Medical Center, and Jose R. Reyes Memorial Medical Center.

Under PPP, the private investor will recover its investment by running the hospital as an enterprise for profit. Every health service will have a cost equivalent. It means that there will be token or no free or affordable service for the poor.

This scheme exemplifies privatization as a factor that bedevils the services that are supposed to be accessable for the citizens for free or with a token fee, and belies the claims of the government that liberalization will improve the service because it will result to increased cost that will exclude the majority of the people from the services considering the low wage of the workers and the chronic unemployment problems of the country.

Dangerous grounds

The 1990s, especially under the Ramos administration, saw a concerted effort at streamlining the state bureaucracy. The aim was to transform the Philippine state from a “social” state, one that is concerned with the provision of basic welfare to all citizens, to a “watchman” state, which is primarily focused on securing property rights and ensuring the smooth operation of markets. 

Subsequently, state-owned enterprises were privatized, trade barriers were dramatically reduced, and the private sector was bequeathed with the responsibility to provide basic services such as power and water. The government also withdrew from the oil industry, allowing putative market forces to take over. The aim of the privatization schemes was to ensure efficiency (in supply) and affordability (in access) of public goods. 

Soon, the government confined itself to palliative welfare schemes such as the Conditional Cash Transfer (CCT) program.

The problem, however, is that the privatization of public services has indubitably failed to deliver. Massive power shortages have put into question the supposed efficiency-gains of private sector ownership. With the Philippines having one of the most expensive electricity and oil prices in Asia, accessibility is obviously a major issue -- especially for electoral democracies such as ours.  The CCT schemes, meanwhile, have allowed many developing countries, including the Philippines, to justify stagnant investments in critical sectors such as health and education, which have historically proven to be central to poverty-alleviation and the empowerment of the middle classes.

More for profit than serving

In trying to counter Filipino consumers' seeping rebellion against grievously murderousbasic services costs, as well as, the massive corruption and exploitation of Meralco and Royal Dutch Shell, such as, in force-selling overpriced natural gas (indexed to high-priced diesel oil) through Lopez IPPs or "Independent Power Plants" (Sta. Rita Electric Generating Plant and San Lorenzo Electric Generating Plant), the JFC defended the Epira and energy privatization anew. 

It warned against any review or renegotiation of the onerous IPP contracts with their "take or pay" provisions (which provides that consumers MUST be obliged to pay the owners of power generating plants even if the said consumers did not use a single kilowatt of their electricity and even if the said plants did not even produce a single kilowatt of electricity, which is plain and simple highway robbery).

Filipinos should by now realize that the chief cause of all the economic misery of this nation is the fact that corporations both local and of foreign powers have, time and again, made this country their milking cow.

Only a patriotic and nationalist leadership can change the situation--to restore the power of the public over the profiteering private and corporate sector, re-impose the primacy of public interest over private profit, and re-nationalize all other basic utilities.