Take-offs and Trade-offs:
A Commentary on NAIA’s Privatization
By Isagani Ranillo
When things seem too good to be true, perhaps they aren’t. As deceit continues to plague society, trust must be tested. With the recent — albeit temporary — transfer of the once publicly managed Ninoy Aquino International Airport (NAIA) management to the business conglomerate San Miguel Corporation (SMC), one must step back and assess such a development.
Taking Flight
In a consortium with the Incheon International Airport, SMC was announced to take on the P170.6-billion NAIA rehabilitation project, outbidding two others. This makes it the second airport set to be managed by SMC, the other being the Bulacan International Airport. In determining the winning bidder among the three finalists, Department of Transportation (DOTr) Secretary Jaime Bautista disclosed that the share of revenue the government would receive was the “most important” consideration. The criteria itself becomes problematic — fixated on profit and lacking principled judgment.
SMC’s contract for NAIA allots 82.16 percent of earnings to the government, along with an immediate payment of P30 billion and an annuity cost of P2 billion. With almost all earnings apportioned to the government, SMC President Ramon Ang claims that this undertaking was not in the interest of profit but rather providing Filipinos with better airport service while preparations in Bulacan are still underway. He highlights that a clause in their initial proposal for the Bulacan airport indicated SMC shouldering the rehabilitation cost of NAIA but taking no share of the revenue, but it has since been removed. However much they earn, they ultimately stand to benefit; otherwise, such terms would not have been set in the first place. What else to do with these earnings than expand their empire?
Terminally Wrong
Alluring as they may seem, we must ask ourselves whether the woes of these corporate giants hold value to begin with. Past the philanthropy and smooth-talking, SMC and its subsidiaries remain the same at the core — a business. Contrary to their statements, businesses, more often than not, live to serve themselves.
SMC boasts prominence in various industries, even priding itself among the country’s largest power companies. But behind the curtain, it has pushed to financially burden the masses to fill its pockets. In 2022, SMC subsidiaries and Manila Electric Railroad and Light Company (MERALCO) — cruel capitalists as they are — jointly petitioned to charge higher power rates, which was initially denied but was then overturned in court, effectively hiking energy costs across households.
The extent of SMC’s disservice goes beyond just financial harm, however. They also put the environment and people’s well-being at risk. Fossil fuels power the majority of their total energy capacity — 62 percent by coal and 25 percent by natural gas. In 2017, the DENR suspended operations in the SMC Consolidated Power Corp. and the Petron Bataan Refinery, both subsidiaries of SMC, amid reports of residents falling ill with respiratory infections, skin diseases, diarrhea, and hypertension during the construction and operation of their coal-fired power plants. Further, their fossil gas expansion in Navotas that destroyed a mangrove park and the sinking of an oil tanker that resulted in one of the country’s worst oil spills — which they have yet to be held accountable for — not only threatened the area’s biodiversity but also afflicted the health and livelihood of thousands.
Despite claiming to champion sustainability and wholeheartedly serve the people, their actions or lack thereof show otherwise.
Bracing for Impact
SMC’s track record reveals that it is more than capable of casting morality aside in favor of personal gain. So, what could this mean for NAIA in the long term? Much can go wrong in 15 years, more so in 25. If the business model that SMC establishes for NAIA is anything like its own, then NAIA itself could add to the existing heap of issues in the country, eventually leaving the DOTr with the burden of restructuring it.
Moreover, a growing monopoly is a risk. With the Bulacan International Airport already under its control, SMC stands to predominate the air transport sector within the given window. Monopolization essentially cripples competitors by robbing them of opportunity and capacity. This limits any future options simply because nobody can compete. Such entrenchment enables them to get away with certain actions due to the lack of external checks and balances, exacerbating their potential to do harm — a potential is already shown in their continued fossil fuel expansion despite stern opposition.
What differentiates SMC from the government is the latter’s responsibility to the people — to either reduce or refrain from aggravating existing issues. But the same cannot be said about SMC; capitalists are not beholden to civic responsibility for as long as they benefit from violating it. Sure, ethical trade-offs are unavoidable given the nature of conglomerates, but the least the DOTr could have done was select a bidder that did not blatantly disregard societal well-being. At least then, there would be some reconciliation should things go awry.
Providing financial leverage does not erase the consequences of their actions. Thus, to enter a mutually beneficial agreement with them is to be complicit in their injustices. As SMC feigns benevolence, we must question whether they are worthy of trust to begin with. Although we may come to benefit from progress within the walls of NAIA, we must question whether it is worth the ashes it stands on.
