Cabinet tackles power capacity

(We are re-printing herewith an article written by Ernesto M. Pernia, Ph.D., is professor of Economics, University of the Philippines, Diliman, Quezon City, and former Lead Economist, Asian Development Bank which was forwarded to us by Engr. Vicente Loquellano via e-mail)

International airports are a humdrum topic until one realizes that we seem to have too many of them, yet not enough food, power, water, and other basic needs. The subject has become particularly intriguing because another international airport is to break ground this month in Panglao Island, Bohol. President Arroyo herself is scheduled to preside over the ceremony.

The project was first conceptualized more than 20 years back when hardly anyone even dreamt that the island would become a world-renowned tourist attraction. With the typical on-again, off-again manner of government planning, not too many people paid attention to the project. Of late, however, it's been rushed supposedly so that it can be completed in two years before the end of the President's and the provincial Governor's term in 2010.

The key question is: does the country need another international airport in addition to nine existing ones [Laoag, Clark, Subic, NAIA, Iloilo, Mactan (Cebu), Davao, General Santos, Zamboanga, not to mention the one planned for Cagayan de Oro]?

Consider the most recent available data below comparing the Philippines with its ASEAN neighbours. It seems clear that the Philippines has over-extended itself. It already has more international airports than Thailand and Malaysia, and certainly many more than warranted by pertinent indicators.

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Source: ADB, Basic Statistics 2007, and respective country websites.

How can so many international airport be justified in the Philippines with the smallest land area among the four countries, the least number of tourists, a GDP per capita just slightly above Indonesia's which is the lowest, and - shamefully - the highest poverty incidence (percent of population below the official poverty line)?

One has to wonder how our country's leaders can in good conscience countenance the proliferation of international airports that are mostly underutilized, while more basic infrastructure and social services remain inadequate and one of three Filipinos exists in deep and grinding poverty! An additional international airport will be superfluous, a misallocation of resources, and a sheer waste of scarce investible funds in a poor country.

There's another sobering thought. Upon us appears to be an era of increasing supply-demand imbalances and ecological instability, highlighted by the global food crisis, inexorable rise in oil prices, and climate change. These are likely to adversely affect international travel and tourism.

It follows that an international airport in Bohol (and, for that matter, the one in Cagayan de Oro) will be hard to justify on sound economic grounds. The case is made additionally weaker given the proximity of Mactan International Airport. One can't avoid likening it to the controversial NBN-ZTE project, a broadband network that was to electronically link the national government with the LGUs up to the remotest barrios. It has been criticized, among others, as wasteful because there already exist two such privately-provided broadband networks that could well be extended for the purpose if electric power in the provinces can be improved.

However, assuming for argument's sake that Bohol needs an international airport. Why in Panglao of all places? It's the province's crown jewel. Its powdery white-sand beaches and world-renowned biodiversity coupled with its rustic character are what make the island unique and particularly inviting. Indeed, it has been declared by UNESCO a world heritage site, a recognition of the province's vaunted policy of ecotourism and balanced development.

An airport would damage Panglao's ecology, if not in the short run, certainly in the long run. When that happens the very purpose of the airport would be defeated as tourists would shun a damaged environment. Note, for instance, the deterioration of Boracay's ecology owing to wanton overbuilding and commercialization even sans an international airport.

Bohol may need a more adequate domestic airport which could be located elsewhere.

And, obviously, that would cost only a fraction of the amount for an international airport. The extra resources could then be put to better use in boosting food production, improving water and power supply, and enhancing education and health services. Bohol's poverty incidence (34.9% in 2003) is higher than the national average.

One can rephrase the earlier question. How can Bohol's leaders in good conscience be proud of an expensive and questionable project when more than one of three Boholanos are in absolute poverty? Do our local Neroes fiddle while people suffer?

A major reason advanced by political leaders for going ahead with the project - despite unanswered questions - is that preparations are far too advanced and funds have been committed. Doesn't this reflect bankrupt thinking? First, funds are fungible, i.e., can reallocated to better use. Secondly, it's never too late. An analogy is a person who is in imminent danger of contracting cancer. Shouldn't his physician give the right advice and shouldn't the patient dutifully oblige just because it's too late?

The analogy is limited, however. If the patient ignores doctor's advice, that's his personal choice with no negative externality (societal impact). By contrast, if the international airport is pursued despite reservations and risks, the negative externalities will be on society at-large - of the present and future generations.

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