Private sector capital is critical for infrastructure development, and we cannot back-burner that because of the negative effects of a transactional relationship between government and the private sector. A potent and effective Fourth Estate is needed.

This addresses two concerns. One, the criticality of infrastructure build-up as a blanket platform that provides a basic pathway out of latent economic woes. And two, initiatives to develop an empowered, determined and dogged media that not simply reports on infrastructure, but asks the right questions and effectively investigates, audits, and keeps infrastructure’s traditional propensity for fraud and corruption from burying us deeper in debt and destitution.

That second concern is important as many in media metamorphose into mere mouthpieces on one end and on the other, to survive, media meanders into entertainment, providing opium for cancers. As such, unfortunately providing no diagnoses, and thus, leading to no cures.

But first, an environmental scan.

We are not dead. At least not yet. Never mind that there are several vulnerable medium to small-scale enterprises, including former formidable corporate giants, who might think our economy is headed towards that inevitable condition as existential threats from incompetent economic management under the Marcos administration worsen. 

One recent example is our continuing dependence on two of the most influential goods that account for the debilitating inflation that the diminished purchasing power of the peso and the high underemployment data simply cannot catch up with fast enough. 

Even kitchen table food staples like rice, sugar, even salt that account for a substantial portion of our basket of goods and the consumer price index remain stratospherically priced and imported. So does the manic-depressive roller-coaster ride in fuel prices whose weekly schizophrenia has led the public to completely capitulate and surrender its ill-fate to the oil companies and the limp-wristed bystander perspective of impotent energy authorities who oversee these sectors.

High rice inflation could linger until July as market prices keep going up

Despite the undeniably positive directions taken by the Department of Agriculture (DA) – now under new, greatly improved, and professional management – to study, consult and provide focused support for Philippine rice farmers, the importation bias of the DA’s former failed leadership remains. While such bias might temper rice prices a tad, traders and importers continue to be the primary beneficiaries, cursing by the wayside the historically victimized farmers already on subsistence mode. 

The inequity that favors a select few at the expense of the many is characteristic of the renewed cronyism afflicting the headline inflation drivers from food to fuels.

A case in point is the prospect of continuing in the business of rice planting by a moderately successful rice farmer who, as he barely ekes out a profit, is now threatened with having to defend his anemic income against a threatening tax audit. ‘Dead” is a word he eloquently uses to describe prospects for continuing his heroic entrepreneurship.

It is not surprising. Death is an appropriate word. Recently, even one of the largest and perhaps most iconic sugar refineries (central azucarera) was forced to permanently close, an inevitable demise catalyzed by the unbridled prohibitive costs of operations to provide a local staple relative to the importation of cheaper refined sugar. Its defining death, again a boon for a select few sugar traders and importers.

A 97-year-old Philippine company closes down

Regarding the other catalyst of debilitating headline inflation, the dizzying ups and downs of fuel prices as well as the continuing power outages since the start of the year provides a tsunami of volatility that shelves capital formation, foreign direct investments (FDI) and keeps us at the end of the list of desired destinations among investors.

When the late former president Benigno S. Aquino declared the Philippines as “open for business,” he realized the importance of both infrastructure and FDI as critical to alleviating structural economic inequities, the inflationary effects of food shortages, the surrender to foreign fuels and the curses we enumerated above. 

Aquino’s “Private-Public Partnerships” (PPP) program and the “Build, build, build” initiative needed FDI, both domestic and foreign capital, lest they exert tremendous fiscal burdens and necessitate aggressive taxation. Note that among recent presidents, only Aquino avoided new taxes while kicking off a series of tax reforms that increased the exemption brackets for the poor while effectively lowering income taxation for corporations. It is a belief in the Laffer Curve and supply-side economics where lowering taxation, increasing efficiencies, and reducing regulation promotes freer trade and development. 

And allow us to add, it reduces the amount of tax money stolen by crooks.

To avoid bloating debt, fiscal deficits, and increased taxation, such an initiative requires the infusion of private capital in infrastructure to lower the costs to process goods through individual value chains.

Note how competently planned farm-to-market infrastructure shortens the gaps between farmers and consumers. Note how ports, railways, roads, and bridges reduce travel time, decrease instances of food waste and spoilage, and avoid those extortion “checkpoints” that artificially increase food prices. Note how farmer’s markets, strategically located hubs, drying facilities, cold storage, and cold chain infrastructure funded by critical FDI and PPP can alleviate food inflation.

So here we invariably answer two of our reader’s amazingly perceptive questions.

Private sector capital is critical for infrastructure development, and we cannot back-burner that because of the negative effects of a transactional relationship between government and the private sector. That said, third-party watchdog audits, checks and balances, investigative reporting, and serious scrutiny by our threatened media – what was once a potent and effective Fourth Estate – is needed.

Despite the conflicts of interest and the hidden snakes that live within the capital structures of most of local media, some have boldly taken mitigating measures. For instance, Rappler is constantly developing its independence using innovative forms to fortify its autonomy and financial freedom including attracting in-depth discourses and analyses, more extensive coverages and beefing up its in-house capacities to dive deeper into issues.

In the academe where the foundations and the future of our nation is formed, students and educators alongside mid-career media professionals are now undergoing extensive training and education on investigating the relationship between the private sector and government in infrastructure. These are recent developments catalyzed by the realization that crony capitalism has returned with a vengeance.

We are not dead yet. There is hope. – Rappler.com

[ANALYSIS] Investigating government’s engagement with the private sector in infrastructure