The creeping privatization of gov’t

/ 12:11 AM October 10, 2016

The sole reason that justifies the government’s existence is its performance of services that are needed by the people as a community.

There was a time when the range of the public services performed by the government was extensive. Government-provided public services included health, education, transportation, energy, water, and postal service. The government was the principal provider of these community needs, and private companies merely performed cameo roles.


When the government encountered problems of inefficiency and inadequacy of funds, it faced two options: Find ways to improve efficiency and provide adequate funding, or encourage the private sector to engage in the business of providing public services. The government went for the second option, and this policy continues to be implemented today.

As a result of the shift in policy, the government has shared with the private sector the role of providing public services to the people. And private companies have enthusiastically performed this joint role because of the tremendous income gained from any business that provides public services.


The government provides public services as pure service to the people, but the services it provides are famously inefficient. The private sector provides the same public services for gainful profit, and the services it provides are exalted as epitomes of efficiency.

Financial capacity determines one’s choice of public service provider. The poor are stuck with inefficient public services provided by the government. The rich pay for public services efficiently provided by private companies.

Thus, government hospitals, schools, and transportation are patronized by the poor. Private hospitals, schools, and transportation are patronized by the rich. Energy, water, and postal service have all been surrendered by the government to private companies.

The private sector’s expanding conquest of public services is happening even with respect to security and judicial services.

The inadequate security provided by the government has led to the proliferation of private security agencies that provide security guards to the rich. The poor are left to rely on insufficient police security.

With regard to judicial services, the Supreme Court encourages private arbitration by parties who have business and contract disputes. Arbitration essentially involves avoiding the judicial branch of the government and hiring instead a private judge (arbitrator) to decide a dispute.

There is now an increasing trend of businesspersons resorting to arbitration in lieu of court cases. They consider the fast and graft-free arbitration process well worth the millions of pesos they pay in arbitration fees, as compared to the unending delays and the perceived prevalence of corruption in regular courts. In contrast, the poor are stuck with the courts. The unwitting message that reaches the people is this: If you want fast and graft-free resolution of your case, hire and pay for a private judge. Otherwise, make do with government judges.


For the satisfaction of their public service needs, people are now largely turning to profit-driven companies instead of the government. This trend may be contributing to the strange state of our economy—an economy that is posting the highest economic growth rate in the world, with the wealth of business giants growing by leaps and bounds, and with 45 percent of our people still considering themselves poor.

When people obtain an increase in their income, they shift from government-provided services to privately-provided public services: private education for their children, private hospitals for their health needs, and private cars for transportation.

The result is that any income increase attained by our people is captured by private companies providing public services. This may be one reason many of our people continue to feel poor notwithstanding the unparalleled growth in our economy.

It is time to pause and rethink this creeping privatization of the government.

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