InterAksyon, 30 July 2014
By¬†Azer N. Parrocha, Philippines News Agency
MANILA — The government has awarded and signed off on seven Public-Private Partnership projects, with a total value of P62.6 billion in just four years during the Aquino administration.
This was among the achievements cited by President Benigno S. Aquino III during his fifth State of the Nation Address (SONA) on Monday.
President Aquino said that with this number, the government has surpassed the combined six approved solicited PPP projects of the past three administrations from December 2011 to June this year.
These PPPs are:
‚ÄúAgain: Good economics is borne of good governance,‚ÄĚ the President said in his speech.
He also noted that more infrastructure projects will be nearing completion this year including more export expansions, fixing of roads and expressway projects, among others.
Currently, the biggest PPP project at P123-billion is the Laguna Lakeshore Expressway Dike, which is set to be completed by yearend.
InterAksyon, 30 July 2014
By Darwin G. Amojelar
MANILA – The Department of Transportation and Communications (DOTC) plans to award the P64.9 billion LRT Line 1 Cavite Extension Project¬†to the Ayala-Metro Pacific joint venture this week.
“Hopefully within the week. We are routing the LRTA Board resolution to the principal members,” Transport Secretary Joseph Emilio Abaya said today.
Last week, the board of state-run Light Rail Transit Authority approved the award of the project to Light Rail Manila Consortium.
The LRTA Board is composed of 8 ex-officio cabinet members chaired by the secretary of the DOTC. The Departments of Public Works and Highways (DPWH), of Budget and Management (DBM), and of Finance (DOF), the National Economic and Development Authority (NEDA), the Metropolitan Manila and Development Authority (MMDA), the Land Transportation Franchising Regulatory Board and LRTA sit as members.
To recall, the NEDA Boar approved the P9.35 billion premium that Light Rail Manila offered on top of the project‚Äôs P64.9-billion tab.
A tandem between Ayala Corp and Metro Pacific Investments Corp (MPIC), Light Rail Manila was the lone bidder for the project, one of the public-private partnership (PPP) ventures of the Aquino administration.
Jose Ma. K Lim, president of MPIC said the company is ready to comply with closing requirements.
“We are awaiting issuance of notice of award,” Lim said.
MPIC has a 32-year concession to operate and maintain the service for LRT.
The southbound extension of LRT1 would increase the train‚Äôs span from 20.7 kilometers to 32.4, with approximately 10.5 kilometers of the extension elevated and 1.2 kilometers at grade.
DOTC said more than 500,000 commuters everyday use LRT1, which runs from Baclaran in Pasay City to Roosevelt in Quezon City. The southern part of Metro Manila and neighboring Cavite province is home to nearly 4 million people.
InterAksyon.com is the online news portal of TV5, which like MPIC is chaired by Manuel V. Pangilinan.
Rappler, 29 July 2014
In his 5th SONA, the President urges his ‚Äėbosses‚Äô ‚Äď the Filipino people ‚Äď to choose a successor who will continue the economic reforms of his administration
MANILA, Philippines ‚Äď Most of President Benigno Aquino III‚Äôs¬†5th¬†State of the Nation Address (SONA)¬†on Monday, July 28, covered his administration‚Äôs economic achievements to date.
Stressing the government‚Äôs thrust of investing in the Filipino people, Aquino said the country‚Äôs¬†poverty incidence decreased to 24.9% in the first half of 2013 versus¬†27.9% in the same period of the previous year.
The 3 percentage points decrease was equivalent to about 2.5 million Filipinos who hurdled the poverty line, Aquino said.
‚ÄúWe are not stopping with what we have achieved. We are continuing our efforts to ensure that those who hurdled the poverty line would not return to their previous state anymore,‚ÄĚ Aquino said in Filipino.
The President also cited the economy‚Äôs resurgence through prudent fiscal management, and better services rendered to the people without any hike in taxes, except for the Sin Tax Reform Law.
Tax collection was also intensified, shoring up government revenues to P1.536 trillion ($35.42 million*) in 2013 from P1.094 trillion ($25.22 billion) in 2010.
Citing judicious debt management, Aquino said the government was able to reduce the country‚Äôs debt to Gross Domestic Product (GDP) ratio, allowing the allocation of more funds for social services.
Obligations that were inherited from previous administrations have also been cleared, the President noted.
The P50-billion ($1.15 billion) recapitalization of the Bangko Sentral ng Pilipinas is now fully paid. The recapitalization was implemented in 1993, but the administration of former President Fidel Ramos only settled P10 billion ($230.58 million).
‚ÄúWe cannot bear to squander whatever funds we have now that we worked hard for,‚ÄĚ Aquino said.
He boasted of the¬†7 public-private partnership projects (PPPs)¬†his administration awarded, versus the 6 solicited PPPs implemented by the previous 3 administrations. (READ:¬†Aquino: More infra projects awarded than past 3 admins)
The President also said that during his administration, the government won¬†investment grade status from international credit ratings agencies¬†Fitch, Moody‚Äôs, and Standard and Poor‚Äôs (S&P). The rating upgrades were a vote of confidence in the country‚Äôs macroeconomic fundamentals.
‚ÄúS&P recently gave the country another upgrade, boosting our credit worthiness, attracting more investors, and in effect, hastening the benefits deserved by the Filipinos,‚ÄĚ Aquino said.
The aviation industry also finally started to take off as the¬†International Civil Aviation Organization cleared the Philippines¬†of significant safety concerns. Also last year, the¬†United States Federal Aviation Administration¬†upgraded the country‚Äôs aviation status back to Category 1, allowing local airlines to launch more routes and flights to the world‚Äôs largest economy. The¬†European Union also lifted its ban on Philippine Airlines¬†and Cebu Pacific.
With the joint efforts of the Civil Aviation Authority of the Philippines and local carriers, the country should expect more investors and tourists in the coming years, Aquino added.
Ready for the world
‚ÄúThere is no doubt: the Philippines is indeed more open for business,‚ÄĚ Aquino said.
At the end of his SONA, Aquino reminded his ‚Äúbosses‚ÄĚ ‚Äď the Filipino people ‚Äď to choose a successor who would continue the reforms his administration started.
‚ÄúOne basis for choosing my successor: Who will, without a shred of doubt, continue the transformation we are achieving?‚ÄĚ ‚Äď¬†With a report from Lynda C. Corpuz/Rappler.com
Rappler, 28 July 2014
The agency is set to award the PPP project to sole bidder: the consortium of MPIC and Ayala groups
MANILA, Philippines ‚Äď The Department of Transportation and Communications (DOTC) will award within the week the P65-billion ($1.5 billion*) Light Rail Transit (LRT) 1 Cavite extension project to the tandem of Metro Pacific Investments Corporation (MPIC) and conglomerate Ayala Corporation.
The consortium of the groups, Light Rail Manila,¬†was the lone bidder for the public-private partnership (PPP) project. The consortium is led by MPIC, with a 55% stake, and Ayala, with 35%. Macquarie Infrastructure Holdings (Philippines) Pte Ltd holds the remaining 10%.
DOTC Secretary Joseph Emilio Abaya said the agency would issue the Notice of Award to the consortium once it receives the board resolution from¬†the Light Rail Transit Authority (LRTA) approving the project.
‚ÄúOnce we receive the LRTA Board resolution signed by the principals, we will then issue the Notice of Award. We hope to do it early or middle this week,‚ÄĚ Abaya stressed.
The¬†LRTA board approved the project on July 25¬†was based on the recommendation made by the DOTC Special Bids and Awards Committee on July 21, LRTA spokesperson Hernando Cabrera said.
The¬†National Economic and Development Authority board, chaired by President Benigno Aquino III, approved on June 19 the offer made by Light Rail Manila.
The LRT extension project will lengthen Line 1 from 20.7 kilometers to 32.4 km, with a new south endpoint in Niog, Bacoor, Cavite. Approximately 10.5 km of the Cavite Extension System will be elevated and 1.2 km will be at grade level. The extension will serve nearly 4 million residents of Para√Īaque, Las Pi√Īas, and Cavite.
More than half of the project cost of the PPP will cover the construction of the tracks, the stations, and all its attendant facilities, while P30 billion ($692.46 million) will be used to purchase the trains to be funded by the government through official development assistance. ‚Äď¬†Rappler.com
*($1 = P43.32)
ABS-CBN News, 29 July 2014
MANILA ‚Äď Metro Pacific Investments Corp. (MPIC) is taking its time in selling part of Metro Pacific Tollways Corp. (MPTC) to foreign investors.
MPIC President Jose Ma. K. Lim said it is still waiting for Malacanang to resolve issues in the North and South Luzon Expressway connector road and the planned expansion of the Manila-Cavite Expressway (Cavitex).
‚ÄúWe‚Äôve received expressions of interest from others but we are not in a particular hurry to dilute because we are still waiting for news on the connector road and the expansion plans of Cavitex which needs to be approved,‚ÄĚ Lim said.
MPIC said in May that foreign investors are interested in buying at least a 20 percent stake in MPTC, which is the country‚Äôs largest toll road operator.
MPIC owns 99.8 percent of MPTC.
MPTC owns 71 percent of NLEX and SCTEX operator Manila North Tollways Corp. (MNTC); 100 percent of Cavitex Infrastructure Corp.; 46 percent of Tollways Management Corp (TMC); and 29.45 percent of Thailand‚Äôs Don Muang Tollway Public Company Ltd (DMT) via FPM Infrastructure Holdings Ltd.
Legal issues in the joint venture between Metro Pacific Tollways Development Corp. (MPTDC) and Philippine National Construction Corp. (PNCC) in the NLEX-SLEX connector road have been raised, resulting to delays in the project.
Lim said the company hopes that the matter will be resolved soon with the intervention of President Aquino as the project has been pending with the Toll Regulatory Board (TRB).
‚ÄúIf there is any question, the government should take a position as to what is the correct process because we are only following directions of the government on which structure whether Swiss Challenge or not. The government should tell us clearly,‚ÄĚ he said.
Lim added that MPIC is also waiting for the approval of the expansion of Cavitex.
He also noted that had MPIC won the bidding for the Cavite-Laguna Expressway (CALAX) project, the company would have pursued the entry of a strategic partner.
‚ÄúThere is no real rush, but had we won CALAX, that would have been different,‚ÄĚ he said.
InterAksyon, 29 July 2014
By Darwin G. Amojelar
MANILA – Metro Pacific Investments Corp (MPIC) is in no hurry to sell up to a fifth of the conglomerate’s tollway unit.
“We‚Äôve received expressions of interest from others, but we are not in a particular hurry to dilute because we are still waiting for news on the Connector Road and the expansion plans of Cavitex, which needs to be approved. So there is no real rush but if we’ve won CALAX that would have been different,” Jose Ma. K. Lim, MPIC president told reporters last week.
MPIC owns 99.88 percent of Metro Pacific Tollways Corp (MPTC), which in turn owns 71 percent of Manila North Tollways Corp (MNTC), 46 percent of Tollways Management Corp (TMC), 100 percent of Cavitex Infrastructure Corp, and 7.4 percent of Don Muang Tollway Public Co Ltd.
Based on MPIC’s estimate, the 20 percent stake in MPTC would fetch P16 billion.
The Metro Pacific Group is building the P18 billion road connecting the North Luzon Expressway to the South Luzon Expressway.
The NLEX-SLEX Connector Road, or Segment 10.2, would be integrated to Segment 10.1, a 5.65-kilometer road that starts where Segment 9 ends on MacArthur Highway and stretches all the way to C3 Road.
The Department of Justice recently issued a legal opinion, requiring that the project undergo a Swiss challenge because it was proposed through unsolicited venture.
The Department of Transportation and Communications (DOTC) had endorsed the joint-venture route to expedite the project. To recall, Metro Pacific Tollways Development Corp (MPTDC) earlier sealed a joint venture with Philippine National Construction Corp (PNCC) in a bid to facilitate construction of the NLEX-SLEX Connector Road.
Cavitex Infrastructure Corp is pursuing the construction of the P8 billion C5 Link Expressway Project, which is expected to start by January 2015.
The project involves the C5 crossing the South Luzon Expressway and passing through Merville Subdivision beside the Ninoy Aquino International Airport before connecting to the Cavitex. The project has yet to be approved by the Toll Regulatory Board.
In 2012, MPIC entered into a P6.77-billion financing and cooperation agreement with Cavitex Holdings Inc that may eventually allow MPTC to take 100 percent of Cavitex Infrastructure.
Under the agreement, Cavitex Holdings will issue a convertible note to MPTC, giving it the option to convert the debt to new, non-voting redeemable preferred shares or, subject to certain approvals and conditions, common shares of Cavitex Infrastructure.
The Metro Pacific Group also operates the Subic Clark Tarlac Expressway.
InterAksyon.com is the online news portal of TV5, which like MPIC is chaired by Manuel V. Pangilinan.
Inquirer.net, 28 July 2014
By¬†Kristine Angeli Sabillo
MANILA, Philippines ‚Äď A mega dike in Laguna and a green city in Subic are among the top public private partnership (PPP) projects being eyed by the government, President Benigno Aquino III said during his fifth State of the Nation Address.
He said the public bidding for the Laguna Lakeshore Expressway Dike would begin before 2014 ends.
The project will address flooding in the area through the construction of a dike, which will also result in cleaner water for Laguna Lake.
Aquino said it would also help lessen traffic congestion because of the construction of an expressway, from Los Ba√Īos to Taguig, on top of the dike.
He said it won‚Äôt cost the government anything, only a portion of the reclaimed land, which will serve as the payment to the winning bidder.
On the other hand, Aquino said the Clark Green City will be the ‚Äúcenter of commerce and industry in Central Luzon.‚ÄĚ
He said it will be larger than the Bonifacio Global City.
Manila Standard Today, 28 July 2014
By Othel V. Campos
The cement industry expects a flat growth in sales this year, due to the slow approval of infrastructure projects under the public-private partnership scheme and a projected lower expansion of the construction industry.
‚ÄúThe general momentum is positive, but not sufficient or not moving fast enough.¬† PPP projects, though taking a tad too long, would definitely help improve sales,‚ÄĚ the Cement Manufacturers Association of the Philippines said over the weekend.
Cement sales grew 5.9 percent in 2013 to 19.445 million metric tons from 18.356 million MT in 2012.¬† The cement sector posted a growth of 17.5-percent growth in 2012, the highest over the last 15 years.
Cement sales increased 3.2 percent in the second quarter to 5.519 million MT from 5.349 million MT a year ago and 5.7 percent in the first half to 10.718 million MT from 10.136 million MT in 2013.
CMAP said, however, PPP projects were not moving fast enough to start construction this year.
Cement companies are currently expanding capacity to support the expected increase in government spending for road construction, repair and rehabilitation to improve road networks and spur economic growth.
CMAP said demand for cement and construction materials would be led by the need to put up more infrastructure projects.
Three PPP projects were moving this year, including phase 1 of school infrastructure project with estimated cost of P16.28 billion, Daang Hari-South Luzon Expressway link road project and Naia expressway project.
Business World, 29 July 2014
Business World, 29 July 2014
By Marites S. Villamor
‚ÄúThe next wave of economic development is going to be about soft infrastructure, intellectual capital and services,‚ÄĚ Brian Murray, chief economist and head of research of AIA Group Ltd., said in a press conference.
Mr. Murray, who was among the speakers during an investor forum organized here by Philam Asset Management, Inc. (PAMI) on Friday, said investments in ‚Äúsoft‚ÄĚ infrastructure such as education and health care should be on top of the hard infrastructure projects being executed.
He lauded the government‚Äôs public-private partnership program (PPP), saying it is ‚Äúexactly what the Philippines needs in terms of providing the basis for long-term economic growth.‚ÄĚ
The government has rolled out seven PPP projects cumulatively worth P62.6 billion as of June.
However, Mr. Murray said the government should accelerate the rollout of PPP projects or risk losing the country‚Äôs competitive edge over other Southeast Asian countries, which are also implementing infrastructure projects.
‚ÄúThailand and Malaysia are also trying to build their infrastructure. If they execute (infrastructure projects) and have new airports and better roads and ports and the Philippines doesn‚Äôt, then it could be a problem in the long term,‚ÄĚ Mr. Murray said.
He said the Philippines could afford to increase infrastructure spending, given its strong financial position.
‚ÄúPublic finances in the Philippines are actually good. Fiscal deficit is 1.5% of GDP (gross domestic product) and public debt is under 50% (of GDP). You could afford a higher fiscal deficit and you should have more fiscal spending to build more infrastructure,‚ÄĚ he added.
Mr. Murray noted that the country‚Äôs GDP growth has been ‚Äústable, unleveraged and balanced.‚ÄĚ
The Philippine economy expanded by a faster-than-targeted 7.2% last year and is expected to grow 6.5-7.5% this year. Growth, however, eased to a weaker-than-expected 5.7% in the first quarter from 7.7% a year ago. Mr. Murray said the consensus among economists is a GDP growth rate of 6.4% for the Philippines while the International Monetary Fund has cut its Philippine growth forecast to 6.2% from a previous projection of 6.5%.
‚ÄúYour growth is not leveraged. It‚Äôs not based on expanding credit. On the contrary, it is based on high savings,‚ÄĚ he said.
‚ÄúYour growth is balanced. It‚Äôs not reliant on consumption like the US economy. It‚Äôs not reliant on investments like the Chinese economy. It‚Äôs not reliant on exports like the German economy.‚ÄĚ
And while inflation has been picking up, Mr. Murray said, ‚Äú[t]he bigger reason I‚Äôm not concerned is that the BSP (Bangko Sentral ng Pilipinas) has been very proactive in maintaining stable growth and not letting inflation threaten economic growth since the 2008 financial crisis.‚ÄĚ
The country‚Äôs inflation rate averaged 4.2% last semester from just 2.9% in the same six months last year, according to latest official data.
He noted that the Philippines posted relatively strong GDP growth rates despite external shocks from the 2008 financial crisis, Eurozone crisis in 2010-2011, the big influx of liquidity from quantitative easing purchases since last year, and even the taper tantrum that led to outflows of capital last year.
The Philippines also weathered domestic shocks like Bohol‚Äôs powerful earthquake in October and super-typhoon Yolanda (international name: Haiyan) in November last year.
‚ÄúYou had a slowdown, a bit of an uptick in inflation,‚ÄĚ Mr. Murray noted. ‚ÄúBut GDP outlook and public finances haven‚Äôt fundamentally changed. On the contrary, they remain on the positive track.‚ÄĚ
An obvious caveat is that if there‚Äôs war in the Middle East or the Russia-Ukraine situation escalates and oil prices spike, it would be hard for the Philippines to maintain high growth rates, Mr. Murray said. ‚ÄúI do think the Philippines would be resilient to the aftereffects of a big spike in global oil prices,‚ÄĚ he said.
Meanwhile, he said the Philippines, with its strong fundamentals, is likely to attract capital inflows as central banks increase liquidity. He said capital inflows would come not only from the US, which is ending its quantitative easing program, but also from Japan and the European Union. ‚ÄúThe bias in central banks, particularly in the developed markets, is towards more liquidity and towards more loosening. More liquidity is possible because inflation is not a threat in any of the major economies,‚ÄĚ Mr. Murray said.
As of June, Japan reported a 3.3% inflation, but is targeting to end the year with 2% while the EU reported an inflation rate of 0.5%. ‚ÄúThis is actually a deflation, so expect a quantitative easing program from the European Central Bank at some point this year,‚ÄĚ Mr. Murray said.
PAMI is holding a series of forums to provide investors with the information and tools with which to make sound investment decisions. A similar forum will be held in Davao City next month and in Metro Manila at a later date.