Biz Buzz: Still wide open

As everyone knows by now, the tight race for the governorship was settled earlier this month with an unexpected, last-minute victory for Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla Jr.

And as we reported subsequently, the three upcoming vacancies in the powerful Monetary Board of the BSP—the group that decides on the direction of interest rates, banking regulations and, perhaps more importantly, sanctions for erring financial institutions —have already been filled.

Biz Buzz heard that at least two of the three names suggested to President Duterte by a close and influential adviser are likely to beg off from the powerful and prestigious appointments.

This is a big surprise of course, given that a Monetary Board appointment is the next best thing a banker wishes to end his career with (barring that one doesn’t get the “best thing”, being the governor of the BSP, of course).

Word on the street is that one of the shoo-in would-be appointees who plans to trade “peace of mind” for the prestige of an MB appointment is banker Vicente “Vicot” Panlilio. Now semi-retired, Panlilio apparently does not want to get stressed and worry about potential lawsuits invariably bring to MB members. And any given MB member gets several lawsuits during the course of their six-year terms, courtesy of the owners of banks that they shutter or sanction.

The other shoo-in would-be appointee who also plans to politely beg off, we hear, is Aurelio “Gigi” Montinola III. The former president of Bank of the Philippine Islands also does not want the burden of grappling with lawsuits in the performance of one’s regulatory duties, according to friends.

The problem, of course, is that the law does not protect BSP officials from lawsuits filed against them in the performance of their banking duties. This is a big difference from central bankers in other countries who enjoy immunity from suit whenever they close errant banks, for example.

“These potential lawsuits against MB members are ‘personal’ liabilities instead of ‘institutional,’” said one business personality close to both gentlemen. “We can’t really blame them.”

Perhaps it’s time for Congress to give bank regulators protection from legal harassment in the performance of their duties. Meanwhile, the race for MB appointments is still open, apparently. —DAXIM L. LUCAS

Airport privatization conundrum

Last week’s announcement that five regional airports were cut from the Public-Private Partnership pipeline sent a wave of disappointment across the private sector.

No, not because interested bidders were particularly shocked at the development (it turns out many were warned this was a huge possibility). The government, after all, had repeatedly signaled its preference for funding via the General Appropriations Act or overseas development assistance (ODA) loans to build or expand infrastructure projects.

The private sector would be welcome to participate later on, via the bidding of the operations and maintenance contracts, or so goes the plan under its hybrid PPP policy.

The government argued that GAA or ODAs were supposedly cheaper and more expedient—although many would agree, with history as a guidepost, that this was arguable at best.

In any case, fresh worries stemmed not only from the fact that the regional airport PPPs were likely the last PPP that business groups had actually prepared for.

It didn’t even arise from the PPP Center’s passionate defense of the regional airport PPP and the way their projects are currently structured. (That was in the PPP Center’s statement that we could only interpret as a form of push back to the new way things are being pursued).

The worries come from the growing belief that the Duterte administration may not be following the best advice when approaching these infrastructure projects and, moreover, it wasn’t open to other inputs.

The private sector’s preference for speed is apparent, no matter who actually builds these projects. Many of these projects, apart from providing better public services, could be huge economic drivers, which, in turn, are good for their bottom-line. They only need to get built, and sooner rather than later.

The most recent example was the scrapping of the regional airports PPPs or even private sector offers for Clark International Airport. (Three groups have made offers for Clark: Metro Pacific Investment Corp.’s P336.6-billion proposal, which includes a railway; Megawide-GMR’s P250-billion proposal and the P187-billion bid of JG Summit and Filinvest.)

Those closely watching this space said ODAs or GAA were good funding options—but only for simpler projects such as roads and bridges or infrastructure that offered little to no returns such as flood control facilities or dams.

Airports are far more complex, with a multitude of aspects from land to air and everything in between.

“Haven’t we learned from Laguindingan [International Airport],” lamented one of these insiders, referring to multiyear delays the air gateway struggled with ahead of completion.

Eyes are closely watching how the administration will proceed with its “build build build” program. Fingers are crossed it won’t be another “wait wait wait.” —MIGUEL R. CAMUS