The Philippines has among the most developed private-public -partnership (PPP) programs for the Asia-Pacific region, if not the world, an Asian De­velopment Bank (ADB) report said.

The report, “Meeting Asia’s infrastructure needs” cited the Philippines as an ex­ample of a good PPP promo­tion that was the result of con­ducive regulatory frameworks and effective institutions.

“In the 2014 edition of the PPP Readiness Index for Asia and the Pacific, the Philippines was ranked among the devel­oped group of countries in the study,” the ADB said.

It noted that the Philip­pines was among those im­proving the most and had the most-improved score on regu­latory and institutional frame­works.

It also scored among the leading countries for improved investment climate and finan­cial facilities, the ADB said.

The study indicated that Asian nations must spend $26 trillion by 2030 on infrastruc­ture to battle poverty, boost economic growth and fight climate change.

The ADB report said governments in some of the poorest countries in the world should invest in everything from transport, telecommuni­cations, power and water and sanitation.

It added that despite dra­matic infrastructure growth in recent decades, more than 400 million people still have no ac­cess to electricity, 300 million lack safe drinking water and around 1.5 billion are without basic sanitation.

“The demand for infra­structure across Asia and the Pacific far outstrips current supply,” ADB President Take­hiko Nakao said in a statement released alongside the report.

“Asia needs new and up­graded infrastructure that will set the standard for quality, encourage economic growth, and respond to the pressing global challenge that is climate change,” Nakao said.

The more than $1.7 tril­lion needed each year, from 2016 to 2030, is twice the $881 billion invested at the moment,

the Manila-based ADB said.

It suggested the bulk of the cash, $14.7 trillion, should be spent on power, $8.4 trillion on transport and $2.3 trillion on telecoms. It indicated $800 billion for water and sanita­tion.

The report added that of the total annual amount, $200 billion should be invested in mitigating climate change, re­newable energy and public transport.

But it said a substantial in­frastructure gap still remained in the 45 countries included in the report.

And while several coun­tries around the region have promised hundreds of billions for new building programs, in­cluding India, Indonesia and the Philippines, problems such as bureaucracy and corruption act as a drag.

Analysts also say govern­ments should look to private finance for help. “Mobilizing private capital flows to fund the financing gap that cannot be met by public financing is still a major challenge,” said Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight in Singapore.

Infrastructure spending in the region should be maintained at $1.5 trillion per year, if the region is to maintain growth momentum, the report said.

The ADB estimates that East Asia will ac­count for 61 percent of climate-adjusted in­vestment needs through 2030.

As a percentage of gross domestic prod­uct (GDP), however, the Pacific leads all other sub-regions, requiring investments valued at 9.1 percent of GDP.

“This is followed by South Asia at 8.8 per­cent, Central Asia at 7.8 percent, Southeast Asia at 5.7 percent, and East Asia at 5.2 per­cent of GDP.

Currently, the region annually invests an estimated $881 billion in infrastructure, the ADB said.

The report said regulatory and institu­tional reforms are needed to make infrastruc­ture more attractive to private investors and generate a pipeline of bankable projects for PPPs.

“Countries should implement PPP-related reforms such as enacting PPP laws, streamlin­ing PPP procurement and bidding processes, introducing dispute resolution mechanisms, and establishing independent PPP govern­ment units,” it added.

The ADB said deepening of capital mar­kets is also needed to help channel the region’s substantial savings into productive infrastruc­ture investment.

“Multilateral development banks (MDB) have financed an estimated 2.5 percent of in­frastructure investments in developing Asia. Excluding the China and India, MDB contri­butions rise above 10 percent,” it noted.

A growing proportion of ADB finance is now going to private sector infrastructure projects, it said.

The report added that beyond finance, the ADB is playing an important role in Asia by sharing expertise and knowledge to identify, design, and implement good projects.

05 March 2017