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Inclusive growth pushed

The Philippine Star, 23 May 2014

By Aurea Calica


MANILA, Philippines – Southeast Asian leaders voiced their commitment to inclusive growth during the World Economic Forum (WEF) on East Asia yesterday as they cited the importance of investing in people to improve lives and protect resources.

Inclusive growth has been President Aquino’s goal since becoming president in 2010.

“It is a truly symbiotic relationship: As we empower our people to improve their lot in life, they empower us to battle the vested interests that remain in society,” Aquino said during the opening plenary of the forum also attended by Indonesian President Susilo Bambang Yudhoyono, Vietnamese Prime Minister Nguyen Tan Dung and Myanmar Vice President U Nyan Tun in Makati City.

“Ultimately, it is our countrymen who give us the confidence to continue blazing the path of reform,” Aquino said.

The four leaders expressed optimism about the future of the region despite the enormous challenges that they admittedly would have to hurdle to further improve their countries’ economies.

Aquino said the biggest resource of the Philippines now is its people, who have been the principal players in turning points in the country’s history.

He stressed the collective efforts of the Filipino people have “allowed us to achieve national redemption and progress” despite the “worst efforts of our leaders” at times.

Aquino cited the restoration of democracy through the bloodless People Power Revolution in 1986 and the elections in 2010 during which Filipinos took a stand against decades of neglect, corruption and impunity by giving his administration a mandate to initiate reforms.

He emphasized that good governance is good economics and that large-scale reforms in every aspect of society would only take root if inclusive growth is achieved.

The President noted that reforms have made it harder for unscrupulous officials to tinker with taxpayers’ money and ensured punishment against “all those who committed wrongdoing – regardless of their power, wealth, or influence.”

The task, however, is not that easy, he pointed out.

“As you may have guessed, tangling with these very wealthy individuals and sectors with vested interests was not an easy task. But those in our administration were not shaken: Dismantling the culture of corruption was a promise we made to the people,” he declared.

“If we truly wanted to improve the lives of our people, we could not possibly shirk from this challenge. We had to take on all those who had a misplaced sense of entitlement – who believed that they had more rights than their fellow Filipinos,” Aquino said.

Proof of his administration’s determination to make wrongdoers – even those in high places – accountable were the hospital arrest of his predecessor and now Pampanga Rep. Gloria Macapagal-Arroyo who is facing corruption charges, and the ouster of then chief justice Renato Corona for failing to declare over 98 percent of his wealth in his statement of assets, liabilities and net worth.

“It is evident: Our country is in the midst of a dramatic turnaround in every sector, and we are intent on continuing this trend and making certain that each and every Filipino enjoys the full dividends of progress,” he said.

All signs point upward

Despite the expected rise in population in the coming years, opportunities still abound for the country to reach or even breach economic growth targets, he said.

“All signs for the future are pointing upwards: According to United Nations population projections, in 2015, we will be hitting a ‘demographic sweet spot’ that will last approximately for the next 35 years,” Aquino said. “Countries in such conditions post an average yearly growth of 7.3 percent over the next 10 years. We are incredibly poised to take full advantage of the situation, having made strategic investments in education and skills training, which will equip our future workforce with the correct skills to fill the jobs that are being and will be created,” he maintained.

He stressed that it’s ultimately the people who would propel the country to inclusive growth and global competitiveness.

“This is why inclusive growth is not just a mantra for us; it is the yardstick by which we measure any government undertaking. After all, it is a participatory public – one that is empowered, and one that gives government their trust and confidence – and a government that never misplaces that trust that ultimately makes equitable progress possible,” Aquino said.

He also said the country was able to survive its “darkest moments” through the “patriotism, the willpower, and the wisdom of the Filipino people.”

He said the country now has public servants “fully committed to harnessing their power for good – for the betterment of the nation” and help sustain the economic momentum.

Aquino said this has enabled the nation “to go from success to success, and truly make waves throughout our archipelago, in the international community, and in the vast, immeasurable ocean of history.”

Resources unleashed

With reforms freeing significant amounts of resources, the administration was able to undertake bigger development projects and invest more in social services.

He cited the expanded conditional cash transfer program and the adoption of the K-12 scheme to make the educational system at par with global standards.

“There is a simple idea behind all these initiatives: Our people are the be-all and end-all of this government, and we are not content with waiting for the benefits of growth to just trickle down the social pyramid,” he said.

“This is why, from the beginning of our term, most of our efforts have been targeting the poorest of the poor. This year, however, we have expanded the scope of our efforts and are now likewise targeting those who are deemed ‘near poor,’ or those who are one catastrophic illness or one natural disaster away from going below the poverty threshold,” he added.

He said the country’s achievements have even attracted the attention of major credit ratings agencies.

He said the WEF itself has given the country a positive outlook.

“And we are set to build on our momentum and become even more competitive, as our manufacturing sector continues its revival, and as we continue to increase our infrastructure spending – more than doubling it, from around P200 billion in 2011 to more than P400 billion in 2014,” he said.

Leaders’ consensus

Indonesian President Yudhoyono, who arrived in the country yesterday for a state visit and to participate in the WEF, said Manila’s hosting of the event “is a solid vote of confidence for this country’s remarkable economic achievements.”

“We live in an extraordinary era. Asia is in the midst of a revolution. This revolution is quite a different kind than the explosive 20th century revolution, but equally if not more powerful,” he said.

Vietnamese Prime Minister Dung said the holding of the WEF on East Asia in Manila “indicates the interest of the international business community and the Philippines’ reform efforts and fast growth in the recent years.”

Dung also lashed out at China’s aggressive moves in regional waters, saying full development cannot be achieved without stability.

“Development is not possible without peace and stability. Vietnam always strives for peace and stability in Asia Pacific, and is optimistic about the future prospects and cooperation development in the region,” he said.

Klaus Schwab, founder and executive chairman of the WEF, praised the Philippines for its rebound despite being hit by disasters, particularly Super Typhoon Yolanda.

“We are indeed moving forward in every step for the inclusive, equitable, and sustainable development. It’s a long way to go; however, we are moving forward. I am confident that this situation will bring inspiration to understand the importance of promoting growth with sustainable development,” said Myanmar vice president U Nyan Tun.


Philippines to pursue more reforms in next 2 years

The Asset, 25 May 2014


While quite a number of governance reforms had already been put in place over the last four years, the Philippines’ Aquino administration is bent on implementing more.

The country’s finance secretary Cesar V. Purisima said the administration will continue to take advantage of the political capital of President Benigno Aquino III to pursue additional reforms in his remaining two years in office.

This is to help ensure the good governance agenda is institutionalized and sustained beyond 2016.

“The people have come to know the impact of good governance on their lives as the economy makes huge strides,” Purisima said in one of the sessions of the 23rd World Economic Forum on East Asia (WEF-EA), which the Philippines recently hosted.

As the public appreciates the benefits of good governance, he said, the administration is hoping for the swift passage in Congress of bills backed by the executive branch.

Some of these legislative measures are the amendment of the charter of the Philippine central bank, the streamlining of customs procedures, the rationalization of fiscal incentives, and the easing of restrictions on foreign investments.

The bill seeking to amend the regulator’s charter is aimed at providing the monetary authority with more flexibility in managing liquidity in the economy. It is also aimed at giving the central bank more teeth in regulating banks.

One of the key provisions in the proposed bill seeks to allow the central bank to trade its own bonds in the capital market. Another seeks to require banks to secure prior approval of the regulator before changes in their ownership structure take place. This is to ensure the financial entities are managed by qualified people.

The bill seeking to streamline customs procedure is aimed at helping the bureau of customs in its fight against smuggling, while the one seeking to rationalize fiscal incentives seeks to lift unnecessary tax perks to boost revenue collection of the state.

The bill easing restriction on foreign ownership is aimed at boosting investments and job creation, and increasing incomes.

So far, some of the key reforms implemented in the first four years of the Aquino administration include the Sin Tax Reform law that raised levy on alcohol and cigarettes, the Reproductive Health law, the tighter campaign against smugglers and tax evaders, and the reform in the national budget process to have integrity in handling of public funds, among others.

Moreover, infrastructure development has been accelerated under the Aquino administration.

Purisima said that out of over 50 projects included in the Public-Private Partnership (PPP) programme, seven have been awarded to winning bidders.

These projects are the Daang Hari-SLEX Link Road, the first and second phases of the PPP for school infrastructure project, the Ninoy Aquino International Airport (NAIA) Expressway Project, the modernization of the Philippine Orthopedic Center (MPOC), the automatic fare collection system, and the Mactan-Cebu International Airport passenger terminal building.

Purisima said that with the continued pursuit of reforms, the Philippines, which has become one of the fastest growing economies in Asia, is expected to generate more gains in the economic and political front.


Schools tapped to help LGUs with PPPs

Business World, 25 May 2014

By Alden M. Monzon


THE PHILIPPINE government has tapped higher educational institutions to help boost the capacity of local government units (LGUs) to handle public-private partnership (PPP) projects.

“We wanted to engage these credible and apolitical academic institutions, given their inherent potential to assist LGUs and their understanding of local conditions and realities. This will also establish the presence of PPP resource institutions all over the country,” Undersecretary Cosette V. Canilao, Executive director of the PPP Center, said in a statement dated May 22.

The PPP Center said that it has entered into a formal agreement with the University of the Philippines Planning and Development Research Foundation (UP-Planades) and the Jesse M. Robredo Institute of the De La Salle University to help conduct the capacity building program.

LGUs as well as national agencies have called for more capacity building as the PPP model has increasingly become the favored option to fund infrastructure and development projects, according to the PPP Center.

Ms. Canilao said that the agency has arranged for the necessary personnel from both UP-Planades and the Jesse M. Robredo Institute to undergo appropriate briefing and training next month.

“I think the schedule will be this June,” Ms. Canilao told BusinessWorld via telephone.

She also mentioned that a PPP manual for national line agencies is in the works and will be published soon.

“By second or third quarter — June or July,” she said, when asked when the manual would be ready.

As of last week, there are a total of 57 PPP projects in the government’s pipeline.


DPWH finalizing agreements for Cavite-Laguna expressway

Rappler, 25 May 2014


DPWH is finalizing the MOA for the interconnection of Calax with the Manila-Cavite expressway

MANILA, Philippines – The proposed Cavite-Laguna Expressway (Calax) project will soon be underway, with the Department of Public Works and Highways (DPWH) finalizing agreements with various companies for the P35.4 billion project.

In Supplemental Bid Bulletin No. 37, DPWH undersecretary Eugenio Pipo Jr. said the agency is finalizing the MOA with the Cavitex Infrastructure Corporation regarding the interconnection of the Calax with the Manila-Cavite Expressway.

“The DPWH is in the process of finalizing the MOA with the Cavitex Infrastructure Corp. regarding the interconnection of Calax with the Cavitex,” he stated.

“DPWH shall ensure the interconnection of Calax with Mamplasan Interchange and will secure the necessary agreements and consent from Greenfield Development Corp., South Luzon Tollway Corp., and the Toll Regulatory Board.”

This is the third public private partnership (PPP) expressway project under the Aquino administration, following the P2 billion Daang Hari-SLEX link project scheduled for completion by June 2015 and the ongoing P15.5 billion Ninoy Aquino International Airport (NAIA) expressway project.

Last May 19, the agency discussed the proposed changes in the alignment of the project with the prequalified bidders:

  • The Ayala-led Team “Orion” composed of the consortium of AC Infrastructure Holdings Corporation, Aboitiz Land Inc., and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd.
  • Metro Pacific Investments Corporations’s MPCALA Holdings Inc.
  • San Miguel Corporation’s Optimal Infrastructure Development Inc.
  • Malaysia’s Alloy MTD Philippines

Under the revised DPWH guidelines, bidders are required to submit a bid either as a concession payment to the government or viability gap funding (VGP) not exceeding P5 billion.

The original guidelines stated the basis of the bid was the toll fee per kilometer for Class 1 vehicles in 2018.

Under the new guidelines, bidders who would offer a premium instead of asking for a subsidy would likely win the project; as the government is reluctant to pay the subsidy to generate more savings.

For the third time, the DPWH also deferred the submission of bids for the project to June 2 instead of May 21 to give bidders enough time to prepare their documents.

The proposed four-lane expressway is expected to provide a faster and more convenient route to or from Metro Manila to the Calabarzon region (Cavite, Laguna, Batangas, Rizal, and Quezon). –


Independent body needed to regulate PPP

Business World, 21 May 2014

By AJMS and Alden M. Monzon


WORLD Economic Forum (WEF) experts noted that the Public-Private Partnership (PPP) program of President Benigno S. C. Aquino III — touted by his administration as an efficient solution to completing infrastructure projects — is far from perfect.

“The government should actively pursue establishing a robust legal and institutional PPP framework, with an independent regulatory function and a trusted dispute-resolution process to enhance regulatory commitment,” Pedro De Almeida, head of Infrastructure and Urban Development Industries, World Economic Forum, told BusinessWorld in an e-mail.

Mr. De Almeida added that PPP is “not a panacea to all the infrastructure challenges,” and that the government should select the best delivery model for infrastructure projects after considering “key criteria” such as funding basis, popular perception, and market competition.

Hanseul Kim, Associate Director and Head of Engineering and Construction Industry of the World Economic Forum, said that the ideal setup would be to separate the functions of the agencies involved in PPP projects.

“The point here is to establish entities with separate authorities (i.e. policy-making, contracting, monitoring, and dispute resolution) with a clear governance structure in order to avoid any conflict of interests, and to have clear responsibilities and competencies,” Mr. Kim said in a separate e-mail.

“This way, authorities can be independent from the political influence or other externalities, and be able to carry out long-term infrastructure plans, often over 10-20 years, that generally exceeds more volatile political duration,” he added.

In the Philippine context, the contracting, implementation and policy-making functions reside with several different national line agencies and government departments.

The reviewing and approving bodies, depending on the costing of the project, are the National Economic and Development Authority (NEDA) Board, the Investment Coordination Committee (ICC) and the Local Development Council.

The NEDA Board is chaired by the President of the Philippines, with the Socioeconomic planning Secretary as Vice-Chairperson, and counts as members the secretaries of Agriculture; Budget and Management; Energy; Environment and Natural Resources; Finance; Interior and Local Government; Public Works and Highways; Science and Technology; Trade and Industry; and Transportation and Communications.

Other members include the Vice President of the Philippines, the governors of the Autonomous Region in Muslim Mindanao and the Bangko Sentral ng Pilipinas — the country’s central monetary authority — as well as the chairman of the Metro Manila Development Authority.

The PPP Center, established on Sept. 9, 2010 by Executive Order No. 8, is the attached agency of the NEDA that monitors projects and coordinates with implementing agencies and other concerned parties.

Its previous incarnation was the BOT Center, established by law in 1990 as an attached body of the Department of Trade and Industry.

Dispute resolution, however, is handled either by each implementing agency’s Special Bids and Awards Committee (SBAC) — in which the PPP Center has observer status — or via proper filing with the courts.

This is separate from the other bids and awards committees of agencies, which are covered by Republic Act (RA) 9184, or the Government Procurement Reform Act.

NEDA Undersecretary Cosette V. Canilao, the executive director of the PPP Center, agreed that regulatory agencies should not be a contracting party in government projects in order to preserve their independence.

She also mentioned that while there are government agencies sharing some of the functions, they are currently trying to change the system through amendments in RA 7718, or the Build-Operate-Transfer (BOT) law.

“There is an overlap for some regulatory and contracting parties. That is being proposed to be separated in the BOT law amendments,” Ms. Canilao said in an e-mail.

Ms. Canilao added that they are planning to institutionalize the role of the PPP Center as the secretariat for the ICC committee and the NEDA board to complete its role as an effective facilitator.

“Infrastructure PPP projects face a number of challenges over their life cycle, such as regulatory failures, public budget risk, restricted control and flexibility on the assets under the government, lack of transparency in business and renegotiation of contract terms, and these challenges can significantly alter the feasibility of projects,” Mr. De Almeida said.

He added that the decades-long lifespan of some projects can compound investors’ “perceived risks” for returns, noting that in emerging markets, about 6% of PPP projects have experienced distress or cancellation, and over 50% have involved subsequent renegotiation.

Department of Transportation and Communication (DoTC) spokesman Michael Arthur C. Sagcal said that legal challenges arise from private-sector bidders’ desire to expand the scope, and that changes to aspects of bids during the auction process, such as the various terms of reference, are due to government factoring in the bidders’ expertise.

“We also learnt from LRT-1, where DoTC crafted the terms of the LRT-1 project to be more advantageous to government, and we found out that the bidders were actually being very frank when they told us we should change some of the terms,” adding that the auction failed because the financial terms made “little sense” to them.

The project, known as the Light Rail Transit Line-1 Cavite Extension, will be bid out on May 28 after a failed attempt in August 2013, where only one of four pre-qualified bidders made a conditional offer.

The government has since bundled rights to the design for a Common Railway Station at the northern end of EDSA with the project to make it palatable to bidders.

The Aquino government has so far awarded seven projects costing a total of some P62.6 billion under its flagship PPP Program, but it appears that all, save for two or three, are not foolproof legally.

Of the seven awarded, only the school building projects — bid out in two phases — and the NAIA Expressway project have been spared from protests by the losing bidders, or from legal suits.

The awarding of the P1.72-billion Automatic Fare Collection System (AFCS) was questioned both in court by a consumer group and at the DoTC level by the losing bidders.

Awarding of the P17.52 billion Mactan-Cebu International Airport (MCIA) Passenger Terminal Building project also hit snags after second highest bidder Filinvest Development Corp.-Changi Airports International MENA Pte. Ltd. (FDC-CAI) questioned top bidder’s, the tandem of GMR Infrastructure, Ltd.-Megawide Construction Corp., financial capability and raised conflict-of-interest issues.

Questions from the San Miguel-Citra group, particularly SLEx concessionaire South Luzon Tollroad Corp. (SLTC), meanwhile stalled the completion of the Daang Hari toll road, which was awarded to Ayala Corp. in 2011.

A petition, meanwhile, was filed with the Supreme Court seeking to stop the privatization of the Philippine Orthopedic Center (MPOC), also a PPP.

“If done correctly, the PPP model can offer significant advantages to the governments, as well as business and society. By better allocating capacity, risks and incentives to the stakeholders, the model can improve project selection, accelerate infrastructure provision, optimize the costs and utilities throughout the asset’s life cycle, and bring more possibility for innovation,” Mr. De Almeida noted.


Moody’s: New upgrade for Phl possible

The Philippine Star, 21 May 2014

By Kathleen A. Martin


MANILA, Philippines – A senior official of Moody’s Investors Service hinted yesterday at the possibility of the Philippines securing another credit rating upgrade soon.

“Last year, when we upgraded the Philippines to investment grade, we also assigned a positive outlook so I think that was a pretty clear signal that we thought that further adjustments to credit (rating) are forthcoming within the next 12 to 18 months,” Christian de Guzman, vice president and senior analyst at Moody’s, said.

Moody’s in October last year raised the country’s credit rating to Baa3 from Ba1 and assigned a positive outlook.

“We’re still fairly bullish on the way things are going here,” De Guzman said but noted the credit rater is assessing how the country fares as compared with other economies graded with the same rating.

“What we’re looking for… our ratings are also somewhat ordinal ratings, that is, we’re comparing one country versus another through this ratings scale. So what this means is we’re looking to see if the Philippines continue to outperform other countries with the same rating,” De Guzman said.

Moody’s rating action last year was on the back of the Philippines’ robust economy, fiscal and debt consolidation, and political stability and improved governance.

De Guzman said that the country’s tax efforts will have to be improved as the share of tax revenues to total GDP remains low.

“It is a fact that the tax revenue as a share of GDP in the Philippines is amongst the lowest among investment grade countries so there is still room for improvement. But at the same time, you can also say that the government is not spending beyond its means so even though tax revenue as a share of GDP is low, expenditures as a share of GDP is also low,” de Guzman said.

But the recent efforts being undertaken by the new Customs Commissioner to collect more revenues is a credit positive for the Philippines, the debt watcher said.


Good governance is good economics

Philippine Daily Inquirer, 21 May 2014

By Cesar V. Purisima


As policymakers and business leaders gather in Manila this week for the World Economic Forum on East Asia, the talk will inevitably turn to growth.

Sustaining economic growth has become harder for Asian policymakers as interest rates in the developed world rise on signs of recovery. After years of easy credit, emerging markets will have to compete for funds to fuel development, and woo investors with fundamentals and structural reforms.

Reforms have the power to alter a country’s economic destiny. This is why they inspire confidence from markets, businesses and citizens. To see how reforms can change perception and reality, one may look at the Philippines.

Since assuming office in 2010, President Aquino has turned around a country from being “the sick man of Asia” to an economic comeback story. He undertook reforms that economists have been urging and politicians shirking (from). These include the Sin Tax Law that raised the levy on alcohol and tobacco products, and spurred the revamp of commonplace procedures.

Our reforms have been rewarded.

Rating upgrade

Gross domestic product grew by 7.2 percent in 2013, the fastest in the Asean (Association of Southeast Asian Nations) region, notwithstanding natural calamities, including Super Typhoon Yolanda (international name: Haiyan) that is said to be one of the strongest ever recorded.

Moreover, the Philippines received investment grades from Fitch, Standard & Poor’s and Moody’s in 2013, lowering the country’s borrowing costs and allowing us to redirect funds for social services and infrastructure. The Philippines earned another rating upgrade this month from S&P, which showed the reforms will endure beyond President Aquino’s term.

A powerful force

Our efforts have boosted the country’s ranks in global surveys. Its rank jumped 26 places in the World Economic Forum’s Global Competitiveness Index since 2010, and 30 places in the International Finance Corp.’s  Doing Business Index in 2013.

Despite our gains, much remains to be done both at the national and Asean levels. In the remaining years of our term, the Aquino administration will intensify efforts at reform by opening up more sectors to foreign investments, rationalizing tax incentives and institutionalizing transparency.

Those who doubt our commitment should take note of the unpopular enactment of the reproductive health bill and the amendment of the Sin Tax Law.

Across Asean, we must integrate our economies in a way that simplifies rules and lowers the cost of doing business. With our young populations and growing economies, we have the potential to become a powerful force for liberalization. However, we need reforms.

Without those, growth is fleeting. For too long, many politicians have avoided unpopular reforms. But our citizens deserve better.

Reward for telling truth

The Aquino administration’s electoral success and approval ratings are proof that voters listen to, and reward, politicians who tell the truth. This is as true in the rest of the Asean as it is in the Philippines.

The good news is that reforms are not rocket science. We are well-aware what needs to be done. Good governance is good economics. Just look at the Philippines.

(Editor’s Note: Cesar V. Purisima is the finance secretary of the Philippines. Manila is hosting the World Economic Forum on East Asia from May 21 to 23).


Cavite-Laguna expressway bidding set early next month

Malaya Business Insight, 21 May 2014


The Department of Public Works and Highway (DPWH) yesterday said it will proceed with the bidding of Cavite-Laguna Expressway (CALAX) early next month.

“We clarified some of their concerns on the alignment and we addressed  all the other concerns so we are  pushing with the June 2 bidding” Rogelio Singson DPWH secretary said.

Singson said bidders include MTD Capital Bhd, MPCALA Holdings (Metro Pacific Investments Corporation), Optimal Infrastructure Development Inc. (San Miguel Corporation ) and Team Orion (Ayala Corporation, Aboitiz Land, Inc., Macquarie Infrastructure Holdings (Philippines) Pte. Limited) are present during the meeting

After CALAX , Singson said that the next line up for bidding  will be the Central Luzon East or the Laguna Lake Expressway but it will be presented first to National Economic Development Authority (NEDA) for approval .

The Central Luzon Link Expressway (CLLEX), Phase 1 (Tarlac-Cabanatuan, Nueva Ecija) is a 4-lane expressway with a total length of 30.7 kms. It diverges from SCTEx at 2.5 km north of Luisita Interchange then ends in Cabanatuan City. The project cost stood at P 9.958 Billion

The Laguna Lakeshore Expressway Dike (LLED) is about 47 kilometers expressway dike with two (2) sections as follows: Bicutan-Calamba; Calamba-Los Baños . the project cost stood at P 122.8 billion of which P 57.89 billlion will be for reclamation and P 64.9 billion for expressway.

The CALAX 35.4 billion project will start from the CAVITEX in Kawit, Cavite and end at the SLEX-Mamplasan Interchange in Biñan, Laguna. It has interchanges in nine locations, namely: Kawit, Daang Hari, Governor’s Drive, Aguinaldo Highway, Silang, Sta. Rosa-Tagaytay, Laguna Blvd., Technopark, and a Toll Barrier before SLEX.

The project is a 4-lane, 47.02 km at-grade which will connect the Manila-Cavite Expressway (CAVITEX) and South Luzon Expressway (SLEX) through the Cavite and Laguna provinces.


World-class Palawan airport to open in ’17

Philippine Daily Inquirer, 21 May 2014

By Miguel R. Camus


Korean group to design, build $82.9-M facility

A world-class international airport at Puerto Princesa, Palawan, is set to open in early 2017 as the Department of Transportation and Communications (DOTC) on Tuesday said that the airport expansion project was finally awarded to a Korean group.

DOTC said in a statement that the $82.9-million design-and-build contract was awarded to Kumho Industrial Co. Ltd.-GS Engineering and Construction joint venture (Kumho-GS), which is set to start work on a new passenger and cargo building, apron, taxiways and navigation facilities by the end of this year.

“Kumho-GS will have around thirty months to complete the project, which means that the DOTC expects the modern airport to be fully operational by the first quarter of 2017,” DOTC said in the statement. Upon completion, the airport will have an annual capacity of about 2 million passengers.

In 2013, it counted 1.34 million passengers, or way beyond the passenger terminal building’s current estimated capacity of only 350,000 passengers an annum, the statement showed.

The project is largely funded through a Korean Export Import Bank (KEXIM) loan amounting to $71.6 million. The loan is payable in 40 years, inclusive of a 10-and-a-half-year grace period, at an interest rate of 0.1 percent a year. Bidding for the project was limited to South Korean firms, the statement showed.

“The ecotourism showcase that is Puerto Princesa, as well as the rest of Palawan, will soon have a modern, world-class airport, which we can be as proud of as the destination itself. With beaches and other natural wonders attracting throngs of visitors from all over the globe, it will finally have a gateway that is befitting of its stature,” Transportation Secretary Joseph Abaya said in a statement.

“Apart from boosting our tourism sector, this project will also generate jobs, particularly in the infrastructure sector. Overall, the estimate is up to 1,400 total new jobs during construction alone,” Abaya added.

In compliance with its engineering, procurement and construction contract, Kumho-GS will begin with the design component by the third quarter of this year. While the joint venture is preparing the airport’s detailed engineering design, it will also begin mobilizing its equipment and securing various project permits.

As a tied official development   assistance (ODA) loan, the bidding process was governed by the Guidelines for Procurement of Korea’s Economic Development Cooperation Fund (EDCF) and decisions were concurred with by KEXIM.

Earlier this year, the DOTC awarded the contract for another major international airport, the Mactan-Cebu International Airport, under the Aquino administration’s Public-Private Partnership (PPP) program. “It is also expected to boost tourism and economic activity, not only in the Visayas region, but for the country as a whole,” the transportation department said in the statement.


Korean firms bag Palawan airport

Manila Standard Today, 21 May 2014

By Lailany P. Gomez


The Transportation Department on Tuesday awarded an $82.9-million contract to design and build the Puerto Princesa international airport in Palawan to a joint venture of Kumho Industrial Co. Ltd. and GS Engineering & Construction of Korea.

The Kumho-GS joint venture was named as the successful bidder for the Puerto Princesa airport project, in a process that was largely funded by a $71.6-million Korean Export-Import Bank soft loan and was only open to South Korean companies.

Puerto Princesa is the capital of Palawan, with its rainforests and beaches being marketed as an ecotourism destination.

“The eco-tourism showcase that is Puerto Princesa, as well as the rest of Palawan, will soon have a modern, world-class airport which we can be as proud of as the destination itself. With beaches and other natural wonders attracting throngs of visitors from all over the globe, it will finally have a gateway that is befitting of its stature,” said Transportation Secretary Joseph Emilio Abaya.

Abaya said in compliance with the engineering, procurement and construction contract, the Kumho-GS joint venture would begin with the design component by the third quarter of the year.

The agency said while the joint venture was preparing the airport’s detailed engineering design, it will also begin mobilizing equipment and secure various project permits.

Civil works at the existing site, or the build component, will begin in the fourth quarter of 2014.  The project scope includes the construction of a new passenger terminal building, cargo terminal building, apron, connecting taxiways, a new air navigation system and other support facilities.