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The Failures of Privatization in the Philippines

The document discusses the privatization efforts in the Philippines in the 1990s under the Ramos administration. The goal was to transform the state from providing welfare to citizens to a "watchman state" focused on property rights and market operations. State-owned enterprises were privatized and basic services like power and water were given to the private sector. However, privatization has failed to deliver on promises of efficiency and affordability. Power shortages have questioned efficiency claims, and Philippines has expensive electricity and oil prices, raising accessibility issues. The document argues for more regulatory oversight of privatized sectors and a balance between government, private sector, and civil society with checks on both. Rethinking recent economic policies is needed to reconsider this relationship and

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Aristina Cantona
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33 views1 page

The Failures of Privatization in the Philippines

The document discusses the privatization efforts in the Philippines in the 1990s under the Ramos administration. The goal was to transform the state from providing welfare to citizens to a "watchman state" focused on property rights and market operations. State-owned enterprises were privatized and basic services like power and water were given to the private sector. However, privatization has failed to deliver on promises of efficiency and affordability. Power shortages have questioned efficiency claims, and Philippines has expensive electricity and oil prices, raising accessibility issues. The document argues for more regulatory oversight of privatized sectors and a balance between government, private sector, and civil society with checks on both. Rethinking recent economic policies is needed to reconsider this relationship and

Uploaded by

Aristina Cantona
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

The perils of privatization

The 1990s, especially under the Ramos administration, saw a concerted effort at
streamlining the state bureaucracy. The aim was to transform the Philippine state from a
social state, one that is concerned with the provision of basic welfare to all citizens, to
a watchman state, which is primarily focused on securing property rights and ensuring
the smooth operation of markets.
Subsequently, state-owned enterprises were privatized, trade barriers were dramatically
reduced, and the private sector was bequeathed with the responsibility to provide basic
services such as power and water. The government also withdrew from the oil industry,
allowing putative market forces to take over. The aim of the privatization schemes was
to ensure efficiency (in supply) and affordability (in access) of public goods.
The problem, however, is that the privatization of public services has indubitably
failed to deliver. Massive power shortages have put into question the supposed
efficiency-gains of private sector ownership. With the Philippines having one of the most
expensive electricity and oil prices in Asia, accessibility is obviously a major issue -especially for electoral democracies such as ours.
It is important for the government to augment its regulatory institutions to
ensure already-privatized sectors are abiding by the rule of law. But beyond that, as
Congressman Walden Bello recently told me, what we need the most is to encourage
both partnership and a balance between government and the private sector, with
checks on both by the civil society via the institutionalization of surveillance and
consultation mechanisms."
If the Philippines seeks a credible shot at climbing the development ladder, we should
profoundly reconsider our recent economic policies. What we need is nothing short of
regulatory soul-searching and ensuring our entrepreneurial classes are given enough
space to institute real market competition.

What is the Role of Government?

In rethinking the proper relationship of government, business and civil society, fundamental political and
economic questions arise. What should the role of government be in protecting the environment, helping
the poor, defending the nation, providing justice, ensuring democracy, protecting public health, ensuring
public safety, providing education, promoting a thriving economy, ensuring safe work environments and a
living wage. Our country must seek a pragmatic balance between social and economic returns.

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