Archive for the ‘News’ Category

Investment community talks up Philippines’ economic prospects

InterAksyon, 22 October 2014
By Krista Angela M. Montealegre

MANILA – Addressing infrastructure bottlenecks will be key for the Philippines if it were to remain one of the brightest spots in Asia, according to participants of the Philippines Investment Conference.

Timothy Moe, chief Asia Pacific regional equity strategist for global investment research at Goldman Sachs, said the long-term growth prospects of the Philippines are among the best in Asia on a trend basis, citing the huge potential to improve productivity and investment accumulation because of the large population and young demographics.

“When you look at the five-year potential average growth rates of the economy, the Philippines is one of the top four in Asia outside China,” Moe told participants of the conference organized by the CFA Institute on Tuesday.

However, supply-side constraints will remain a problem for the Philippines and other Asian nations, which have underinvested in infrastructure in the past several decades. Reallizing this, the government recently revived its infrastructure push to include roadshows outside the country to draw in investors.

“If there is potential for appropriate investment in infrastructure, there is significant productivity gains we can derive from that,” Moe said.

The Philippine economy expanded by 6.4 percent in the second quarter, recovering from the 5.8 percent in the January to March period, to bring the six-month tally to 6 percent and become the second fastest-growing nation in Asia.

“The port congestion in Manila has underscored the need to accelerate infrastructure development as it plays a critical role in supporting economic performance and upholding confidence in international businesses to partake in local industries,” said Finance Undersecretary Jose Emmanuel Reverente.

The Aquino administration has tapped the private sector to accelerate infrastructure development through the public-private partnership (PPP) scheme.

Despite a slow start, the rollout of projects is already picking up, said PPP Center executive director Cosette Canilao, citing the award of eight infrastructure projects worth P127.5 billion since the program took off four years ago.

“Momentum is here already,” Canilao said.

The National Economic and Development Authority, which President Benigno Aquino S. Aquino III chairs, last week approved 12 more projects worth a combined P180 billion.

“We now have a very good PPP platform. The appreciation of the local private sector on how to do PPPs has improved a lot. There is an understanding between the government and the private sector on how we do our biddings and finalizing the terms of concession agreements. We now have a proven process,” Canilao said.

Department of Public Works and Highways Secretary Rogelio Singson said the government is also investing heavily in the countryside, pouring in 30 percent or P63 billion of the proposed P288-billion budget in Mindanao, excluding calamity and Bangsamoro funds.

“Metro Manila is not the Philippines,” Singson said.

For 2013-2016, the government has lined up 952 projects with total investment requirements of P2.06 trillion or $46.69 billion.

The Aquino administration plans to hike infrastructure spending to 5 percent of gross domestic product by 2016. At present, infrastructure spending stands at only 2.2 percent of GDP.

The current regime of low interest rates and predictable inflation, among others, are elements that will support funding for infrastructure project, thus, sustaining the economy’s higher growth trajectory, said Bangko Sentral ng Pilipinas Deputy Governor Diwa Gunigundo.

“We have been able to institutionalize many of these initiatives to make sure the macroeconomy is conducive to sustaining the conditions that will help provide funding and confidence in favor of promoting infrastructure,” Gunigundo said.

With better infrastructure, the Philippines can unlock its full potential, allowing corporates to grow by an average rate of 15 percent or higher, Moe said.

“If that happens, stock markets will go up,” he said.

Philippine economic officials holding another roadshow in U.S.

InterAksyon, 22 October 2014
By Darwin G. Amojelar

MANILA – The Aquino administration’s economic officials are returning to the U.S. this week to make another pitch for investment opportunities in the Philippines.

The Philippine delegation will include Finance Secretary Cesar Purisima, National Treasurer Rosalia de Leon, and Bangko Sentral ng Pilipinas (BSP) Assistant Governor Ma. Cyd Tuaño-Amador.

The non-deal roadshow will run from October 22 to 28 and will cover Los Angeles, Boston, New York, and Philadelphia. Global banks Citi, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, Standard Chartered Bank, and UBS are assisting the Philippine government in the roadshow.

This week’s roadshow comes a month after President Benigno Aquino III went on a state visit to the U.S. to talk up Philippine economic prospects, among others, with some of his economic managers in tow.

Some of them early this month went on a similar trip to Japan to drum up interest in the Aquino administration’s public private partnership (PPP) program.

“The Philippines is poised to remain a bright spot. Updating investors offshore on the country’s economic outlook is a prudent exercise as it helps keep appetite for our government securities,” Purisima said in a statement.

PPP Center to bid out first bundled airports in January 2015

GMA News, 22 October 2014
By Danessa O. Rivera

The Philippine government intends to bid out the first batch of the bundled operation and maintenance of six airports under a single public-private partnership (PPP) project in January 2015, an official said Wednesday.

The six airports to be bundled are Laguindingan, Panglao, Puerto Princesa, Davao, Bacolod, and Iloilo airports, PPP Center executive director Cosette Canilao told reporters on the sidelines of the Philippine Investment Forum in Makati City.

“The target there, since na-approve na ‘yan, iba-bundle, kasi ‘yung apat na airports [recently approved] with the two that were previously approved,” she said.

“Target niyan is December 2014 or January of next year – the bidding for the airports – meaning the issuance of the invitation to pre-qualify to bid for the six bundled airports,” she said.

The National Economic Development Authority (NEDA) approved the development, operations, and maintenance of Laguindingan and Panglao airports last June while those of Puerto Princesa, Davao, Bacolod, and Iloilo airports were approved early this month.

The undertaking of private partners involves the expansion, operations and maintenance of the airports, as well as provide additional facilities and other necessary improvements to enhance passenger safety, security, access, passenger and operational and cargo movement efficiencies.

The reason for bundling the six airports into one PPP project is due to the demand of investors, Canilao said.

“Each airport, maliit sila. To attract more investors, during our market sounding, mas gusto nila mas mataas na passenger throughput,” she said.

But the bundled PPP project could be offered in two tranches, similar to the PPP School Infrastructure Project, Canilao said.

“Pero hindi pa decided. We have an idea already but the final will be during the bidding,” Canilao said.

“It could be ‘yung maliliit or ‘yung tourist destinations versus regional hubs. Could be three-three, or four-two,” she noted.

The Francisco Bangoy International Airport in Davao City is the busiest airport in Mindanao.

The Iloilo International Airport in Cabatuan, Iloilo is the lone airport serving the entire province, while the Bacolod-Silay International Airport serves the general area of Bacolod City, Negros Occidental.

Once completed, the Laguindingan Airport will also replace the Cagayan de Oro (Lumbia) Airport, which served as a passenger “catchment area” of Northern Mindanao.

The new Bohol and Puerto Princesa airports will improve the gateway to two of the top tourist destinations in the Philippines. – VS, GMA News

Fast-track LRT-2 deal post-award process, gov’t urged

Philippine Daily Inquirer, 22 October 2014
By Miguel R. Camus
Group wants to have project ready during Aquino term
MANILA, Philippines–The government was urged to fast-track the post-awarding process for the contract to operate and maintain Light Rail Transit Line 2, as the original timeline placed the turnover during the term of the next administration.

This, according to an interested party, would expose the winning bidder to possible political risks.

Noel Kintanar, executive vice president of Ayala Corp. subsidiary AC Infrastructure, was referring to the turnover of the LRT-2 railway within the second half of 2016, beyond the term of President Aquino, who will step down in the middle of that year.

The indicative schedule for the government’s second railway public-private partnership deal calls for a one-year turnover period after the project is awarded by June or July in 2015.

Kintanar cited past experiences where a government transition could sometimes spell delays for big infrastructure project deals.

“You are not really in control until you take over the asset,” Kintanar told reporters at the sidelines of the pre-qualification conference for the LRT-2 project on Tuesday.

Ayala, in partnership with Metro Pacific Investments Corp., is keen on the LRT-2 deal given that both companies are part of the consortium that recently bagged the P65-billion LRT-1 Cavite extension PPP last month.

PPP Center executive director Cosette Canilao said suggestions from potential bidders, who have until Nov. 20 to submit prequalification requirements, would be reviewed and considered.

Ayala and Metro Pacific are among the groups that have bought bid documents for the project. The others are San Miguel Corp., DMCI Holdings, George Ty’s GT Capital Holdings, RATP Development and Japan’s Marubeni Corp.

The Department of Transportation and Communications, which is implementing the LRT-2 PPP project, is expecting the bid submission to happen between May and June next year.

The DOTC said the winner would operate the existing 13.8-kilometer LRT-2 line from Recto Avenue to the Depot at Santolan Street along Marcos Highway for 10 years, with a possible five-year extension.

The department will separately build a 4.19-km “East extension,” from Santolan to the Masinag market in Antipolo City along Marcos Highway.

It said construction would be completed “by the end of 2016” and would be turned over to the LRT-2 concessionaire.

The DOTC said other extension projects for the LRT system were being studied, including the viability of a so-called west extension to the Divisoria area of Manila.

“Urban infrastructure development has been identified as a priority area by the government.

LRT 2 bidders seek faster turnover of assets

The Philippine Star, 22 October 2014
By Lawrence Agcaoili

MANILA, Philippines – Prospective bidders for the operation and maintenance of the Light Rail Transit line 2 (LRT-2) yesterday asked the Department of Transportation and Communications (DOTC) to speed up the turnover of the mass transit system to the winning concessionaire before President Aquino steps down in June 2016.

Noel Kintanar, executive vice president of Ayala Corp.’s AC Infrastructure Holdings Inc., yesterday asked the DOTC and the Light Rail Transit Authority (LRTA) during the pre-bid conference at the Development Bank of the Philippines (DBP) to hasten the turnover of the system to the winning bidder so it would not be affected by the political exercise in 2016.

Kintanar pointed out that the winning concessionaire for the project could be affected by an inherent risk during the political transition when President Aquino steps down in June 2016.

“I think it is in second semester 2016 when the asset will be turned over. Do you see any inherent risk that the concessionaire will have to go through a political transition and we end up with something that we doesn’t exactly desire,” he asked.

Kintanar, who is representing the Light Rail Manila Consortium (LRMC) which is a partnership with infrastructure giant Metro Pacific Investments Corp. (MPIC), urged the DOTC and LRTA to fast track the assets of the LRT-2 to the winning concessionaire before the May 2016 presidential elections.

“The request could be get everything done before the next elections. It is just the turnover process so we may fast track it,” he added.

LRMC is part of the six companies that bought bid documents for the O&M public private partnership (PPP) project for LRT-2. Other firms include GT Capital Holdings of taipan George SK Ty, diversified conglomerate San Miguel Corp., Marubeni Corp. of Japan, RATP Development, and DMCI Holdings Inc.

Representatives of Globalvia Inversioner SAU of Spain, listed Aboitiz Equity Ventures, and MTR Hong Kong were present during the pre-bid conference.

Interested bidders have until Nov. 20 to submit their prequalification documents and prequalified bidders would be notified on Dec. 20.

The DOTC added that prequalified bidders have until May or June next year to submit their bids followed by the issuance of the Notice of Award in June or July ad the signing of the concession agreement in August or September next year.

The assets of LRT-2 would be turned over to the bidder that submits the lowest O&M fee one year after the signing of the concession contract.

PPP Center executive director Cosette Canilao said the government would look into the request and would find ways to speed up the turn over of the assets of LRT-2 to the winning bidder.

“We will review and go back if it’s doable. The handover can be shortened may be fourth quarter of 2015 or first quarter of 2016,” Canilao said.

Gov’t to pitch PPP projects in Australia

Malaya Business Insight, 22 October 2014
The Public-Private Partnership (PPP) Center is set to stage another road show before the end of the year to promote the flow of foreign investments in the country.

According to Cosette Canilao, PPP Center executive director, the road show is planned for Sydney or Melbourne, Australia.

In a North American investment roadshow last week, more than 50 PPP projects worth around P20.2 billion were showcased to raise foreign awareness in Philippine investment programs.

Around 40 private investors attended the events that were held in Toronto, New York and Washington, D.C.

The government commitment to PPPs, despite bumps and issues on the implementation of the programs, were highlighted during the road show.

Since the start of the administration in 2010, eight PPP projects have already been bid out, with six programs set to be finished before the end of the current administration.

The National Economic and Development Authority also recently approved six more projects, four of which are airport infrastructure development programs.

According to Canilao, western private investors are leaning towards airport projects primarily because of the familiarity in its business model instead of localized toll roads.

The proposed road show in Australia will be the fourth such event of the PPP Center, following the recently held North American event and two in Tokyo, Japan and Singapore.


PPP roadshow in Australia mulled

The Philippine Star, 22 October 2014

By Lawrence Agcaoili

MANILA, Philippines – The government is looking at one more international roadshow to pitch major public private partnership (PPP) projects worth $21 billion after the successful trips to the US, Europe, Japan, and Singapore lured major investors led by the world’s largest asset manager Black Rock.

PPP Center executive director Cosette Canilao said in an interview with reporters that the planned international roadshow would be held in Sydney before the end of the year. “The next one we are planning is in Sydney,” Canilao said.

Canilao disclosed that Black Rock has expressed interest in the country’s infrastructure projects while other American investors are looking into major airport projects in the Philippines.

BlackRock is the world’s largest asset manager with 7,700 portfolios managed and $4.32-trillion assets under management worldwide.

The Philippines kicked off its North America PPP investment roadshow in Toronto, Canada last Oct. 14 followed by New York and Washington DC in the US where Canilao presented 50 PPP projects to 40 fund managers, pension funds, and potential investors.

The presentation featured transportation projects, including airports, massive transport terminals, and rail lines, and highlighted the Regional Prisons Facilities Project as well as the Batangas-Manila Natural Gas Pipeline.

The PPP Center also conducted an international roadshow in Brussels during the recent European trip of President Aquino as well as in Japan, and Singapore.

The Philippines has been encouraging foreign companies to invest in the country’s PPP projects especially now that there is a steady deal flow of investment opportunities in the infrastructure sector and the country’s credit ratings are at an all-time high as evidenced by major international rating agencies’ successive upgrades.

Canilao earlier said the government hopes to roll out 16 PPP projects before the end of 2015.

The roll out of PPP projects in the Philippines is in full swing after the award of eight PPP projects worth close to P133 billion.

Australia PPP road show planned

Business World, 21 October 2014

THE PHILIPPINES’ Public-Private Partnership (PPP) Center plans to hold a road show in Sydney, Australia within the year, after its recently concluded North America campaign sparked the interest of some investors to venture into local infrastructure projects, a senior official said.

On the sidelines of an event in Makati City on Tuesday, PPP Center Executive Director Cosette V. Canilao told reporters: “We are planning another one (road show) in Sydney set within the year, so we can let foreign investors know where the country’s PPP scheme stands today.”

The country’s PPP projects were pitched to investors in a North America investments road show concluded last week. The event, initiated by the PPP Center with the Philippine Consulates and Embassies in Canada and the USA, showcased more than 50 projects in the PPP pipeline with an indicative cost of $20.82 billion.

“Most of the North American investors are interested in airport development projects, probably because they are more familiar with the business model; they even have this organization Asian Aviation Council, Inc. where they come out with a report of the status of all the airports in the involved countries,” Ms. Canilao explained.

The North America road show kicked off in Toronto, Canada last Oct. 14. Ms. Canilao met with fund managers, pension funds and potential investors. After Canada, the show continued in New York. The investments road show ended in Washington DC last Oct. 18, where Ms. Canilao presented transportation projects, such as airports and rail lines. — CJVDP

Early turnover of LRT2 maintenance contract pushed to minimize political risks

InterAksyon, 21 October 2014
By Darwin G. Amojelar

MANILA – Prospective bidders for the operations and maintenance (O&M) contract of LRT2 want the government to accelerate the timetable for the auction to avoid delays resulting from a change in administration.

During the pre-qualification conference for the project, Ayala Corp (AC) head of business development Noel Eli Kintanar said the government should fast track the award and turnover of the LRT2 O&M to avoid “any inherent risk that the concessionaire will have to go through a political transition and we end up with something that we don’t exactly desire.”

“The request could be, get everything done before the next elections. We may fast track the turnover process of the asset,” Kintanar said.

The government aims to hand over LRT2 to the winning bidder in the second quarter of 2016, which coincides with the Presidential elections.

Public Private Partnership (PPP) Center executive director Cosette Canilao said the government will review the proposal to expedite the bidding.

“We will go back if [the revision of timetable is] doable. There is no capital investment [required in the project so revision in timetable] could be viable. The handover of the project can be shortened maybe in the fourth quarter of 2015 or first quarter of 2016,” Canilao said.

The Department of Transportation and Communications (DOTC) set a November 20 deadline for the submission of pre-qualification documents, and May or June next year for the actual bids.

The notice of award is slated for June or July and the signing of the O&M concession agreement on August or September next year.

As of today, six companies have bought bid documents for the project, namely San Miguel Corp, Light Rail Manila Holdings, GT Capital Holdings Inc, Japan’s Marubeni Corp, DMCI and RATP Development.

The winning bidder will take over the operations and maintenance of all 11 stations of LRT2, as well as the 4.19-kilometer Masinag Extension, the construction of which is scheduled to begin in January next year.

The O&M contract would last for 10-15 years.

The LRT2 Extension Project involves adding 4.2 kilometers to the railway from the existing Santolan station at Marcos Highway, Pasig City, all the way to the intersection of Marcos and Sumulong highways at Masinag, Antipolo.

The existing LRT2 is a 13.8-kilometer mass transit line that cuts across five cities in Metro Manila, namely Pasig, Marikina, Quezon City, San Juan and Manila. It passes the major thoroughfares of Marcos Highway, Aurora Boulevard, Ramon Magsaysay Boulevard, Legarda Street and Recto Avenue.

The LRT2 was built at a cost of P31 billion in soft loans mainly from the Japan Bank for International Cooperation (JBIC).

Bidders seek LRT2 turnover before 2016 polls

Rappler, 21 October 2014
By Mick Basa
Bidders fear a political transition might hamper the project turnover if done after a new administration assumes office in 2016
MANILA, Philippines – Vying bidders for the contract to operate and maintain the Light Rail Transit line 2 (LRT2) have asked the government to speed up the turnover of the project before a new administration takes over in 2016.

At the pre-qualification conference of the project, Ayala’s AC Infrastructure Holdings Corporation Executive Vice President Noel Kintanar asked the Department of Transportation and Communications (DOTC) whether the government’s tender timetable of repairing and operating the LRT2 would not be affected by the 2016 elections.

“Do you see any inherent risk that the concessionaire will have to go through a political transition and we end up with something that we don’t exactly desire?” asked Kintanar, who represented the Light Rail Manila Consortium, a partnership between the Pangilinan-led Metro Pacific Investments Corporation (MPIC) and AC Infrastructure.

He added, “The request could be get everything done before the next elections. It is just the turnover process so we may fast track it.”

In its presentation to prospective bidders on Tuesday, October 21, DOTC scheduled the collection of qualification documents on November 20, while pre-qualified bidders would be notified on December 20 – the same date of release of the first draft of the concession agreement to the qualified bidders.

Bidders have until June to July 2015 to submit the bid, as the agency targets to sign the concession agreement with the winning bidder by August or September 2015.

Catherine Gonzales, DOTC Undersecretary for Procurement and Administration, said the following companies have bought bidding papers:

  • San Miguel Corporation
  • Marubeni Corporation
  • Light Rail Manila Consortium (LRMC)
  • GT Capital Holdings, Inc
  • DM Consuji Inc
  • RATP Development

The winning bidder will operate and maintain the 13.8-kilometer railway system from Claro M. Recto in Manila to Santolan in Pasig City, including the proposed extension to Masinag in Antipolo City.

The government also eyes to extend LRT2 to the North Harbor in Manila.

The concession period would run between 10 and 15 years.

While the government is bent in nationalizing the Metro Rail Transit 3, the LRT2 is undergoing privatization for its operations and maintenance.

In October, the government signed an agreement with LRMC to stretch the LRT1 from its current southernmost Balcaran station down to a new south endpoint in Niog in Bacoor, Cavite. The extension will serve nearly 4 million residents of Parañaque, Las Piñas, and Cavite. –