Everything You Need to Know About NAIA Privatization Program

With infrastructure developments and improvements set at the forefront of the current administration's priorities, the proposed privatization of the Ninoy Aquino International Airport (NAIA) is just one of the infrastructure improvements that the national government is seriously undertaking to benefit Filipino commuters.

What does the NAIA Privatization entail and is it good for our tourism industry and for the country as a whole? Lumina Homes will elaborate on this matter in this article. At the end of this piece, we'll also list down properties near an airport that you can consider taking residence in if you want to enjoy the convenience of being near major modes of transportation.

What You Need to Know About NAIA Privatization

In January this year, the Department of Transportation (DOTr) Secretary Jaime Bautista said that the NAIA Privatization plan is only inclusive of maintenance and operations, not assets, which will remain under the government's control.

This clarification was issued after President Bongbong Marcos said that NAIA will not be privatized and will remain government-owned, and that a "private firm cannot own the airport."

Secretary Bautista further stated that the NAIA Privatization was what they have been doing in Mactan-Cebu International Airport and Clark International Airport, whereupon the former is managed by GMR-Megawide while the latter is managed by Luzon International Premier Airport Development Corp., respectively.

As such, the operations and maintenance are managed by the private sector through a concession agreement, but they don't necessarily "own" the assets or the airport itself, the Transportation head confided.

'Hopefully before June'

In a statement made this April, the DOTr chief said that they expect the issuance of the proposed terms of reference (TOR) for the NAIA Privatization on or before June. In essence, the plan is expected to push through in the second half of the year 2023. The Asian Development Bank (ADB) is anticipated to submit its proposed TOR by June this year.

According to DOTr Sec. Bautista, the ADB is still in the process of "finalizing." Furthermore, the transportation secretary hopes that the terms of reference will be finalized on or before June.

The said TOR breaks down the requisites that the project proponents have to abide by in order to participate in NAIA's privatization. In addition, it describes the terms and conditions for the turnover of the international airport to the private sector, which includes the concession period and revenue sharing. The ADB is also carefully assessing the profitability of the future air traffic of NAIA, and whether it will suffice to lure investors to partake in the privatization program.

Aside from NAIA, the Marcos administration is also keen on tapping the private sector for the operations and maintenance of other airports in the Philippines, which is gauged to enhance aviation infrastructure in the country and reduce the government's budgetary deficit.

For the year 2023, the transportation department expects airport projects worth ₱1 trillion to be completed by both the private and public sectors.

Why Privatize?

So, why is the national government privatizing not only NAIA but also other Philippine airports? In fact, it likewise plans to privatize the EDSA Carousel busway this year. And in the past, there have been discussions of privatization for our other transportation modes such as the Philippine National Railway (PNR) and the Metro Rail Transit (MRT).

Not needless to say, the national government has good intentions in pushing for these privatization plans on the country's various transportation systems. Below are just some of the major effects of the privatization program.

Complying with Global Standards

Privatizing public transportation systems in the country is one major step to adhering to global standards. After all, private companies can pitch in to rehabilitate transportation facilities and make necessary improvements. For the busway, this means less competition among bus operators, Secretary Bautista said in a CNN Philippines interview. In essence, there will only be one efficient management to oversee bus operations.

For the airlines, this means private companies can invest in upgrading the airport's facilities, amenities, and modernizing the disgraced airport, which has had a bad reputation for being one of the worst airports in the world for business-class passengers. Who knows, this privatization will help NAIA and other Philippines be recognized as one of the best airports in the Asia-Pacific region in the near future?

Additional Financing

Another important factor that boosts the Marcos administration's intent to privatize NAIA is the additional financing it will receive, which will help cut government expenses. This will become a public-private partnership that is believed to be a win-win situation for the government and the private sector.

Increase Efficiency and Improved Performance

Of course, additional funding is not the Marcos administration's only reason for pushing for the privatization program. Privatizing NAIA and other airports will also result in increased efficiency and improved performance.

This means there will be more satisfied passengers and fewer dissatisfied ones who may benefit from upgrades and improvements in amenities and facilities. As a result, the country's tourism sector can hope for an increase in both local and international guests because of our airports' significant improvements.

Meanwhile, the government can spend its valuable resources on other equally important matters of national concern, while entrusting the private sector will deliver great results in this privatization.

The Caveat: Potentially Higher Rates

Investors for the NAIA privatization are not donors who don't ask for something in return. As a matter of fact, they expect to be financially compensated back for their investments. This means that fares in buses and trains, as well as airport fees on aerial flights, may potentially increase.

Privatization of transportation systems in the Philippines is a contentious subject that is not without criticisms from concerned groups, especially from civil society groups who oppose such programs, citing that the potential increase in fares is anti-poor.

Aside from transportation systems, water privatization, particularly in Metro Manila, is another matter that stirs debate. Political support for water privatization began to gain traction during the Ramos administration, which gave birth to the Water Crisis Act, a piece of legislation that provided a legal framework for public-private partnerships through concession agreements. The Republic Act specifically aims to deregulate the downstream oil industry in the country.

For whatever it's worth, the government must see to it that the push for privatization will benefit Filipino commuters and make our transportation systems more efficient and convenient.

Speaking of convenience, living near an airport is a perk that aspiring property owners must factor in during their homebuying journey. If you’re one of them, consider taking residence in any Lumina community near airports, namely:

•  Lumina Pampanga (near Clark Int'l Airport)

• Lumina Subic (near Subic Bay Int'l Airport)

• Lumina Tuguegarao (near Tuguegarao Airport)

• Lumina Legazpi (near Bicol Int'l Airport)

• Lumina Carcar (near Mactan-Cebu Int'l Airport)

• Lumina Bacolod (near Bacolod-Silay Airport)

•  Lumina Iloilo (near Iloilo Int'l Airport)

• Lumina Pagadian (near Pagadian Airport)

• Lumina Butuan (near Bancasi Airport)

If you need proximity to the country's main airport in Metro Manila, an affordable house and lot for sale in South and Central Luzon communities such as Bulacan, Laguna, Rizal, and Cavite are perfect for you. These Lumina projects are near Metro Manila where the commute is now less hassle due to the development of more infrastructure projects.

A property purchase does not have to be expensive to achieve quality. An affordable house and lot through Lumina Homes is proof. For your unique investment concerns, talk to one of our accredited Lumina sellers today and get the chance to own your dream house and lot in the Philippines from a trusted housing brand.