LABoREM EXERCEnS

The angry response of President Duterte to the scandalous outcome of the water arbitration in Singapore is fully understandable. Why indeed should a sovereign country like the Philippines be haled to court in a foreign land by a private corporation like Manila Water? Who bartered away Philippine sovereignty?

and why should a corporation earning billions and billions of pesos every year from ordinary Filipino consumers be rewarded an extra P7.4 billion “as compensation for losses or damages” supposedly incurred by the corporation when it was not allowed to raise water rates by P5.85 between 2013 and 2017? Yet, in the said period, Manila Water and Maynilad were each accumulating profits amounting to around P6 billion a year. at the same time, they were allowed to pass on to consumers the taxes the corporations are supposed to pay to the government. as a former senator put it, these corporations could not even “moderate their profits.”

the derogation of Philippine sovereignty through the submission of the “complaint” of Manila Water to the Permanent Court of arbitration in singapore is not a novelty. the two water corporations had filed in the past similar tariff rate complaints in the said foreign court and had easily won their cases with nary a murmur of complaint from the previous administrations. as a result, the water rates have been rising through the years and putting to naught the promise of the 1995 Water Crisis act—universal and affordable water to all through the privatization of water distribution.

From the very beginning, the Freedom from Debt Coalition and

other cause-oriented organizations have been critical of this water privatization solution that the Ramos administration embraced with the support of the International Monetary Fund (IMF) and the World Bank. these two institutions played a central role in squeezing or subverting economic growth in the 1980s and 1990s, the two lost decades in Philippine development. they forced the post-Marcos regimes to implement a severe austerity program and an equally severe debt servicing program (in certain years, debt service got the lion’s share of the national budget). these twin programs were responsible for the inability of the government to invest on new infrastructures and upgrade and maintain major public services, such as water and irrigation. thus, it was in these two lost decades that the agricultural sector literally nosedived due to the crumbling rural infrastructures, nonexistent government support and deepening debt. to a great extent, these also happened in the power and water sectors.

then voila, a neoliberal “solution” to the crisis in infrastructures and delivery of basic public services was found—privatization! the IMF and the World Bank, both of which were major contributors to the making of the crisis, became the major proponents of the privatization program, offering new loans to the government and to the interested privatesector participants in the privatization program. In Filipino, what the two international lenders were trying to do is “iginigisa ang bayan sa sariling mantika.”

In the meantime, the government spared no efforts to seduce big corporations to get involved in the various privatization programs. In the case of the water privatization, business participation was made virtually “risk-free” and “tax-free.” as documented by Mae Buenaventura and Bubut Palattao of FDC, the water concession agreements were full of provisions that were lopsidedly in favor of the investing private corporations, such as the liberal treatment of these corporations’ obligations to pay the water concession fees in a timely and substantial manner.

However, the most absurd development was the transformation of the regulatory body and owner of the water assets, the Metropolitan Waterworks and sewerage system, into a baby of the two corporations. the MWss has become dependent on the two behemoths for the MWss budget, including salary and other emoluments of the MWss officials. the regulators have become business