Despite the threat of Severe Acute Respiratory Syndrome (SARS) and its effects on the economy, the Philippines, together with the rest of the world is taking all the necessary precautions in containing the spread and collaborating efforts to combat the atypical pneumonia.

President Gloria Arroyo has appointed Health Secretary Manuel Dayrit to head an inter-agency SARS management team. The San Lazaro Hospital and the Research Institute of Tropical Medicine are the medical facilities assigned to determine, confine, isolate, and monitor suspected SARS cases. A budget of P1.5 billion has been allotted to upgrade hospital facilities and prepare health authorities further in dealing with the virus. As of 7 May, the Philippines had ten confirmed SARS cases.

In the meantime, an ASEAN-China emergency summit was held on 29 April in Thailand. The leaders of participating countries agreed to set up a regional information network to combat SARS and decided to issue a joint statement proposing regional immigration officials to coordinate entry-and-exit policies and measures in response to SARS control and treatment. ASEAN leaders also pledged to keep their borders and economies open despite the crisis.

Effects on Tourism
Philippine tourism is expected to take a bit of a hit due to the SARS outbreak. There was a 9.9% decline in tourist arrivals in March compared to the same month last year, but cumulative data shows there still is a 2.6% increase in foreign visitors for the first quarter of 2003.

While international airlines have been battered by low passenger loads due to the outbreak, Philippine tourism was kept alive by local tourists who preferred to travel within the country rather than go abroad.

According to Tourism Secretary Richard Gordon, the observance of Holy Week last 16-20 April “has spelled good business for many bus companies, airlines, resorts, and hotels in the different regions.” The CALABARZON hotels and resorts posted the highest occupancy rates of 75% to 100%, attributed mainly to its proximity and accessibility from Metro Manila and the surrounding provinces.
Aside from this, domestic visitors were enticed to travel to these areas due to the relatively low transportation costs, as well as the diversity of activities such as golf, diving, shopping, swimming, beach activities, and trekking. It is hoped that domestic tourism can compensate for the slowdown in international tourism that is expected to plague the industry in the coming months.

The Supreme Court ruled 10-3 in nullifying all five contracts of the Philippine International Air Terminals Company (PIATCO) to build the Ninoy Aquino International Airport Terminal 3 (NAIA-3).

The court’s decision said PIATCO from day one was not a qualified bidder since “at the pre-qualification stage, the maximum amounts which the Paircargo Consortium, PIATCO’s predecessor, may invest in the project fell short of the minimum amounts prescribed.”

The decision also concluded that the signed 1997 Concession Agreement was invalid because it “substantially departed from the Draft Concession Agreement included in the bid documents.”

PIATCO said it will appeal the decision. PIATCO lawyer Francisco Chavez described the Supreme Court ruling as “fatally flawed” and will request for another presentation of oral arguments. To the Supreme Court conclusion that Paircargo, PIATCO’s predecessor did not have the financial capacity to build the NAIA-3, Chavez commented, “What better way to dispute that conclusion than by the mere fact that a multi-million-peso structure now stands at the project site.”

PIATCO Vice President Moises Tolentino said if the Supreme Court decision is upheld even after the company has filed its motion for reconsideration, PIATCO will have to make sure that any immediate government takeover is prevented until after just compensation is given or assured to be given to the company.

President Arroyo lauded the Supreme Court decision, saying it is a “major victory for good governance.” Once the Supreme Court decision is made final and executory, the government will temporarily take over the facility before awarding the contract to a new investor. Transportation Secretary Leandro Mendoza likewise stressed that “the matter of just compensation will have to be negotiated.”

Meanwhile, PIATCO investor Fraport AG said it will “make direct claims for compensation,” the basis of which will be the German-Philippine Investment Guarantee Treaty. But the German company said it will be coordinating with its partners in PIATCO in the coming days to talk about legal actions they would take following the Supreme Court decision. PIATCO also said it will continue its bid for arbitration by the International Court of Arbitration (ICA).