Philippine water may quench thirst in Mideast

The Philippines has made an indelible mark in the Middle East, exporting hundreds of thousands of Filipino workers to almost every construction site in the region.

But this Southeast Asian archipelago is now making a bid to become a major supplier of yet another export to the Middle East - water.

A contract in the offing would have fresh water shipped from the Philippines to Abu Dhabi by oil tankers returning from Japan to the Middle East. The deal is being put together by a major oil refining company in the Philippines and a United States consulting firm that helps Abu Dhabi scout for water sources.

Top Filipino officials say the contract will mark the beginning of a major route for the international oil-and-water trade. ''Water exportation could become the flip side of the oil trade between Asia and the Middle East,'' an official said.

Under the irrigation-water supply deal between the Philippines and Abu Dhabi, the Philippines' major selling point is its price: It offers water at an extremely competitive price because the tankers to be used in transporting it are the same VLCCs (very large crude carriers) that transport oil to the Philippines and Japan. These tankers already stop periodically in the Philippines for drydocking and repairs.

Instead of steaming back to the Middle East with empty tanks, they will be filled with water from a huge underground aquifer in the central Philippines. The contracting parties are looking at an initial supply of 50 million gallons of irrigation water a day for discharge in the Middle East.

The Arabs admit that water in their region is often more expensive than oil, but they are highly secretive as to precisely how much fresh water costs them. Nevertheless, estimates vary erratically from a low of $6 per ton to a high of $ 60 per ton. And although Philippine officials would not reveal the price of Philippine water, it is likely to be near the low end of the scale if the returning empty tankers are be used, since transportation costs, the biggest factor in pricing, will be considerably reduced.

Although blessed with rich oil reserves, the Middle East desert kingdoms are chronically short of the water resources they need to broaden their economic base. Saudi Arabia, the biggest state in the Gulf, is known to have 11 major underground aquifers, but the kingdom's rulers are concerned about their exhaustibility.

The Arabs have therefore considered all possible sources of water, including the towing of giant icebergs from the South Pole into the Gulf. It was found, however, that the towing process would result in the contamination of the iceberg with salt water, requiring some desalination. Since desalination has proved to be a costly process, it has reduced the viability of the iceberg project.

The 1977 water shortage in Hong Kong illustrates how uneconomical a desalination plant can be. That year, the British colony put on-stream a desalination plant, only to close it down a few months later because of the unreasonably high operating cost.

In recent weeks, pollution from oil wells damaged in the Iran-Iraq war has caused concern that the salinization plants in the Gulf could be affected.

The traditional external sources of water for the Middle East include France and the Dominican Republic. But the Philippines - although more distant - has built-in advantages in exporting water to the region. It has ample water resources and numerous bay areas suitable for deep ports that can dock huge tankers. But more important, the country is on the tanker route between the Middle East and Japan, one of the busiest oil routes in the international oil trade.

But the water-export program has not been entirely free of criticisms, especially at a time when certain parts of the Philippines are suffering from prolonged drought. Certain groups argue that the government should first ship water from the lake sources to the drought-stricken provinces.

The government, on the other hand, appears to stress the cost-vs.-benefit aspects of the program. An official said that the extent of the drought in the country has not warranted the shipment of water from one region to another since the cost would be too high given the benefits.

Meanwhile, water could eventually replace manpower as the Philippines' major export to the Middle East. As the return flow of petrodollars from the labor-export tap slows down because of cuts in the Middle East states' spending on development projects, the Philippines is eager to open a new valve where water will flow and become a major source of precious foreign exchange.