August 25, 2011
A party-list legislator today urged Congress to remove funding for public-private partnerships (PPPs) in education and healthcare services in the proposed 2012 national budget.
ACT Teachers Representative Antonio Tinio warned that PPPs, touted by President Benigno S. Aquino as an innovative solution to the perennial lack of classrooms and decrepit hospital facilities, will burden taxpayers with higher costs. “The public will only end up paying more. Taxpayers’ money will be used to subsidize private sector profit. PPPs should have no place in social services, especially education and health.”
In the proposed 2012 budget submitted by Malacañang, the Department of Education’s budget includes a Php 5 billion allocation for the first year requirements for the implementation of a PPP scheme to fast-track the construction of classrooms, while the Department of Health has a Php 3 billion allocation for the upgrading, rehabilitation, maintenance, and operation of 25 regional hospitals through PPPs.
Under this scheme, the Deped will enter into multi-year contracts with private contractors for the construction of school buildings. The private contractors advance the cost of construction while the Deped uses its Php 5 billion budget to to pay the first year amortization plus profit. Similar payments will be made yearly until the obligations to the private contractors are paid. According to Deped Secretary Armin Luistro, as many as 60,000 classrooms can be constructed within the year using this mode of PPPs.
A similar arrangement is being eyed by the Department of Health for the rehabilitation and upgrading of its regional hospitals. Private firms may also be tapped for their operation and management.
“This PPP scheme for education and health will cost the taxpayers more because the government must guarantee the private sector partners’ return on investment. Yes, the private contractors can construct the classrooms, but only if it’s profitable for them. That profit will have to come from the pockets of ordinary citizens,” said Tinio. “For this reason, public funding for social services is superior, because there’s no profit motive.”
The ACT Teachers solon pointed out that the classroom shortage can be addressed by the government by obtaining financing for the fast-tracked construction of schools on its own, without private sector partners. “This way, government can secure a loan at a lower interest rate, use the proceeds for a massive school-building program, pay the amortization using its yearly budget allocation, and eliminate the need to pay for private sector profit margins.”
“The Aquino administration must rethink its advocacy of PPPs in general, but especially in education, health, and other social services. Our people’s constitutionally-guaranteed rights to these services will be grossly undermined once they are opened up to money-making enterprises,” concluded Tinio.
The ACT Teachers representative will raise these concerns at the House Appropriations Committee hearing on the Department of Education’s proposed 2012 budget this afternoon. #
ACT Teachers Party-List Rep. Antonio L. Tinio (0920-922-0817)
Julie Anne D. Tapit, Media Officer (0915-762-6522)