MANILA, Philippines?President Benigno Aquino III?s appointment of big business executives to the energy, public works, transportation and communications departments may be good for investors in the long run but bad for consumers in the short term, according to an economic adviser of former President Gloria Macapagal-Arroyo who switched his support to Mr. Aquino.

Albay Gov. Joey Salceda said that foreign fund managers and investors described Energy Secretary Jose Rene Almendras, Public Works Secretary Rogelio Singson and Transportation Secretary Jose de Jesus as ?thoroughbreds? and the ?biggest aces? of the Aquino administration.

?We expect more bang for the buck as these three agencies implement rigorous project selection at the front end and value engineering at the back end of projects,? said Salceda.

?We can foresee larger and incremental durable infra investments, particularly in public-private partnerships as they provide transparency into these transactions,? he said in an e-mail to the Inquirer.

Initial spike

?But for consumers, there could be an initial spike in rates on the back of legacy contracts but these should fall as new supply come on stream. With market confidence, these contracts become contestable markets which, together with higher supply, would compel incumbent players to behave reasonably competitive in pricing tolls, electricity and water.?

Salceda, a former classmate of Mr. Aquino?s, was reacting to criticism that the appointment of Almendras, Singson and De Jesus had created conflict of interest situations in their respective departments.

They control not only 85 percent of public capital outlay but also oversee the regulation of power rates, water rates, toll fees and telecommunication rates.

Almendras was a long-time executive of the Ayala and Aboitiz groups and was president of Manila Water Co. less than three weeks ago. Singson was head of Maynilad Water Services Inc., owned by Metro Pacific and DMCI Holdings, until last month. De Jesus used to be president of the Lopez-owned Manila Electric Co. (Meralco) and executive vice president of Philippine Long Distance Telephone Co.

Salceda said he expected Almendras to take pragmatic approaches to stabilize the Wholesale Electricity Spot Market, or WESM, and make a policy pronouncement for lowering power costs.

Proven himself

He said Singson had proven himself by ?keeping water rates low at Maynilad by fighting the Laiban Dam deal even while keeping the water supply reliable in its concession area, and turning Maynilad into a lucrative firm without price spikes.?

Singson resigned last week as chair of Metropolitan Waterworks and Sewerage System out of delicadeza (propriety). The public works chief had named himself head of the facility in a concurrent capacity, a move that drew criticism.

The proposed P52-billion Laiban dam was a joint venture project of San Miguel Corp. and the MWSS. It would have diverted water from two river systems in the Sierra Madre to supply potable water to Metro Manila.

On De Jesus, Salceda said the former public works secretary of the late President Corazon Aquino was ?a proven hand in infra and his integrity inspires investment confidence that makes Department of Transportation and Communications projects more competitive.?