Source:  Inquirer

President Aquino may have left out the Public-Private Partnership (PPP) program for infrastructure-building when he delivered his State of the Nation Address (SONA) before Congress on Monday, but it remains a key investment theme for the Philippines in 2012, according to American banking giant Citigroup.

In a research paper issued Tuesday, Citigroup said the President’s speech during the opening of the 15th Philippine Congress was consistent with the popular broad themes of his administration: curbing corruption; poverty reduction; and fiscal prudence and efficiency.

“The SONA, however, was surprisingly silent on the PPP infrastructure agenda, [Mr. Aquino’s] centerpiece program and one of the key catalysts for a continued market rerating,” the bank said.

Citigroup believes that the President may have been exercising caution when he omitted the PPP in his speech because the Transport and Communications secretary has just assumed office.

“Meanwhile, his reference to the setting up of new structure for project approvals and implementation to avoid anomalies at the Department of Public Works could be taken as a reason for the PPP delay,” the research said.

Also noted in the speech was the “strong” interest of 140 companies in oil and energy exploration projects.

“This appears to imply that once the structures are in place, the PPP can move at a faster pace. The past month saw the announcement of a new timetable for the bidding and awarding of two road projects under the PPP, which are becoming to be more a 2012 story,” Citigroup said.

Despite the delays, Citigroup said the private sector remained proactive in pursuing projects, which indicated that infrastructure was still a key investment theme.

“We find Metro Pacific (Investments) as most proactive in pursuing opportunities within and outside the PPP. It has submitted an unsolicited bid for the (South to North Expressway) connector road and has offered to acquire the government’s stake in the MRT (Metro Railway Transit) concession,” the research said.

Meanwhile, Citigroup said the speech highlighted the administration’s stance on corruption and poverty, which had led to positive outcomes including cost savings. The bank in particular cited the government’s anti-poverty initiatives, such as expanding conditional cash transfers to marginalized segments, health care and education programs.

“We note that these are key factors that enabled President Aquino to maintain his ‘good’ public net satisfaction rating (based on the Social Weather Station survey), well above the rating of past administrations,” the research said.

But the bank noted that pending fiscal legislation received a less than healthy push from the President. Aside from the 2012 budget, it observed that the President had asked Congress’ support on legislation that would improve social services, environmental management, disaster preparedness, compensation for martial law victims and strengthen selected agencies.

“No mention was made on the urgency to pass fiscal reforms, such as the excise tax reform and rationalization of fiscal incentives,” the research said.