Friday, December 25, 2020

BWorld 466, Tourism, investment and NAIA modernization

* My column in BusinessWorld, December 14, 2020.

At the BusinessWorld Economic Forum 2020 last month, Tourism Secretary Bernadette Romulo-Puyat and other speakers discussed the difficulties of the tourism sector in the current virus scare and lockdown environment and how they cope and plan for the near future. And at the 9th Arangkada Philippines Forum 2020 held by the Joint Foreign Chambers (JFC) of the Philippines this month, Tourism Undersecretary Benito Bengzon, Jr. narrated similar experiences and explained how the sector’s players intend to recover.

Even before the global and national lockdowns and travel restrictions, the Philippines was not getting enough international visitors, attracting only 8+ million in 2019 compared with the 15 to 40 million visiting our major neighbors in the ASEAN. One reason is that while visitors from Vietnam can go by land to Cambodia and Thailand and vice-versa, the Philippines can be reached only by plane or cruise ships.

So if we consider only airplane arrivals or take-offs, the Ninoy Aquino International Airport (NAIA) had few take-offs per day compared to other ASEAN airports except Ho Chi Minh (HCM) in pre-lockdown 2018. And many of these were domestic flights because we are an archipelago (see Table 1).

Another reason why we did not have many international visitors is that NAIA and other provincial airports are small and congested, because flight delays at NAIA (both arrival and take off) were common then. So there is an urgent need to expand and modernize the current NAIA — and also create new international airports near Metro Manila.

I checked the Public Private Partnership (PPP) Center to see the status of various international airport development projects. Two projects have been awarded: the one in Bulacan by San Miguel, and the one in Clark by Luzon International Premier Airport Development (LIPAD). The Mactan Cebu IA (MCIA) passenger terminal 1 has been completed. A very important project, the NAIA expansion, is still under prolonged regulatory review (see Table 2).

We focus on NAIA expansion. The first group that was given Original Proponent Status (OPS) was a “super consortium” composed of seven big conglomerates — Aboitiz InfraCapital, Ayala Infrastructure, Alliance Global (Andrew Tan), Asia Emerging Dragon (Lucio Tan), Filinvest (Gotianun), JG Summit (Gokongwei), and Metro Pacific (Pangilinan). A really big and rich group.

But after two years, negotiations were not fruitful and the government terminated the OPS status of the “super consortium,” and last July, the Department of Transportation asked Megawide to submit an unsolicited proposal to modernize the NAIA complex which the latter accepted. Not long after, Megawide received OPS status from the Manila International Airport Authority (MIAA).

With the lockdowns and with few flights and few passengers using the airport until late 2020, this could have been a good time to start the project, but instead, Megawide has been awaiting approval by the Investment Coordination Committee (ICC) headed by the National Economic and Development Authority (NEDA). Which will be followed by a Swiss challenge.

For various reasons, there have been campaigns, explicit and implicit, to delay if not kill the approval of NAIA rehabilitation and expansion. For what? To leave congested NAIA as it is for many years to come? Or to use more taxpayer money, including those from provinces and islands that do not even use NAIA? These are lousy alternatives since there is already an explicit desire by private corporations to spend their own money and resources to develop, expand, and modernize NAIA.

Passengers want more choices. The airlines too, and the restaurants and other businesses inside the airports. So, if we can have an expanded NAIA to use while the huge Bulacan airport is being constructed, plus the Sangley International Airport which is to be expanded and modernized by the Cavite provincial government and its partner corporations, plus the Clark Airport which is further expanding — these are all good. Good for the passengers and tourists, good for domestic and foreign investment, good for trade and commerce expansion.

The continued delay in the NAIA project approval and the Swiss challenge is not good. Not good for many lockdown-displaced jobless people who want more work opportunities, not good for Philippine tourism and investment promotion, not good for the overall economy.

NEDA ICC should not entertain the delay or kill the NAIA modernization project (which will not use taxpayers money). The failure of the “super consortium” to do the project was already bad for the country’s investment image. Delaying or killing this second chance will further worsen the situation.

See also:
BWorld 463, Senator Recto’s tax cut plan shadows Reagan, Thatcher, and Trump tax cuts, December 04, 2020 
BWorld 464, Meralco, QPPL and expensive solar-wind, December 05, 2020 
BWorld 465, Construction contraction and steel issues, December 13, 2020.

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