Development through Public-Private Partnership

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Recommended: Advantages of privatization

Sclar (2000) provides a simple definition of privatization as the process of providing public services and goods that will be managed by private entities. While this definition leans more on the transfer of ownership and changes in the mechanism of distribution, this also pushes for issues regarding efficiency and quality. Arguments on which entity should control the public resources also come with the question of who handles it more effectively. As this issue involves the public sector and how the government will run the nation’s resources, the common notion in the process of privatization as the way of earning revenues of private companies create concerns to the public of the real interests behind this move. In analyzing this subject, considering certain conditions is necessary to understand the potential benefits and risks of going through this step.

Due to the Philippine’s move towards development, the increase in government spending is inevitable. This requires a source for a larger budget which can be funded by selling assets. Profits can be obtained from these assets if it will be managed properly but maybe due to the political issues and economic crisis, many of the assets are sold or proposed to be sold to private companies. According to the Department of Finance, the national government reported a budget deficit at P53.22 billion for July 2013 which at that period total a P197.84 billion government expenditures compared to the P144.62 billion revenue that can be exhausted. This situation portrays how the government spends much for different kind of projects and why it ventures in privatizing its assets. Privatization also make it possible to remove all the cost the government has to take in managing public utilities lik...

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...micshelp.org/blog/501/economics/advantages-of-privatisation/

http://www.pids.gov.ph/index2.php?pr=136

http://www.washingtonpost.com/blogs/wonkblog/post/more-states-privatizing-their-infrastructure-are-they-making-a-mistake/2012/03/31/gIQARtAhnS_blog.html

http://www.oecd.org/dev/49954093.pdf

http://www.dbm.gov.ph/?p=6681

http://www.gov.ph/2014/02/13/secretary-abad-rapid-sustained-inclusive-economic-expansion-eyed/

The Philippine PPP Program, The BOT Center. Department of Trade and Industry. http://www.philippineconsulatela.org/Trade/02b_Primer%20-%20The%20Philippine%20PPP%20Program.pdf

Privatization of infrastructure assets: financial structures, participant motivations, and lessee tax benefits. Khalid A. Razaki, Raymond Pollastrini, Robert J. Moreland. Journal of Finance and Accountancy http://www.aabri.com/manuscripts/121265.pdf

http://ppp.gov.ph/?p=14948

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