Reuters, 17 October 2014
Oct 17 (Reuters) – Philippine President Benigno Aquino on Friday gave authorities the go-ahead to offer for tender 165.6 billion pesos ($3.7 billion) worth of new infrastructure projects under his flagship Public-Private Partnership program in line with efforts to upgrade ageing roads, airports and ports.
The country needs private funds to upgrade and modernise its dilapidated infrastructure as it aims to lift its growth rate upwards to 8 percent so it can catch up with its richer Southeast Asian neighbours.
To be included in the pipeline of projects that could be offered to investors soon under a PPP scheme are the following: operation and maintenance of the Puerto Princesa Airport (5.23 billion pesos; operation and maintenance of Iloilo Airport (30.4 billion pesos); operation and maintenance of Davao Airport (40.57 billion pesos); operation and maintenance of Bacolod Airport (20.26 billion pesos); Regional Prison Facilities (50.18 billion pesos; and Davao Sasa Port (18.99 billion pesos).
“These approved projects will significantly contribute to the infrastructure investment needed to sustain growth and make it inclusive,” Socioeconomic Planning Chief Arsenio Balisacan said in a statement.
Since launching the PPP programme in 2010, the government has awarded eight infrastructure projects worth around 133 billion pesos. They consist of toll roads, schools, an automated fare collection system, a railroad and a hospital.
The government has faced criticism from investors over the slow pace of its infrastructure roll out, but argues it had to rework the deals to prevent the corruption that has plagued similar projects in the past.
Top conglomerates like Ayala Corp, San Miguel Corp , Aboitiz Equity Ventures Inc, JG Summit Holdings Inc, Metro Pacific Investments Corp and SM Investments Corp have been active in the PPP biddings.
(1 US dollar = 44.8300 Philippine peso) (Reporting By Karen Lema and Erik dela Cruz; Editing by Robert Birsel)
Press Release, 18 October 2014
The countryâ€™s public-private partnership (PPP) projects are currently being pitched to investors in the North America PPP investments road show. The event, initiated by the PPP Center with the Philippine Consulates and Embassies in Canada and USA, showcases more than fifty (50) PPP projects in the pipeline with an indicative cost of $20.82 billion.
PPP Center Executive Director Cosette V. Canilao leads the North America investment roadshow in Montreal and Toronto, Canada and New York and Washington D.C., United States of America.
The road show kicked off in Toronto, Canada last October 14. Executive Director Canilao meets with fund managers, pension funds and potential investors.
After Canada, the investments road show continues in New York and Washington DC. In New York, Canilao has encouraged international companies to invest in the Philippinesâ€™ Public-Private Partnership projects in a forum attended by over 40 potential investors. The forum was organized by the PPP Center in cooperation with Philippine General Consulate.
The investments road show will end in Washington DC today where Executive Director Canilao is set to present in the Forum on PH Infrastructure organized by CGLA at the Philippine Embassy. The presentation will feature 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 Philippines has been encouraging foreign companies to invest in the countryâ€™s PPP projects especially now that there is a steady deal flow of investment opportunities in the infrastructure sector and the countryâ€™s credit ratings are at an all-time high as evidenced by major international rating agenciesâ€™ successive upgrades.
In the past months, the countryâ€™s PPP projects were pitched to investors in Europe during President Aquinoâ€™s official tour, in Singapore at Infrastructure and PPP, Opportunities Seminar-Roadshow and at the Philippine Economic Briefing in Japan. This forms part of the Centerâ€™s thrust to encourage more international players in the Philippine PPP Program.
Infrabuddy.com, 14 October 2014
Almost 16 public-private partnership PPP deals amounting to $11.6 billion to roll out in 2015,
Bidding process for $2.54 billion worth contracts of operations and maintenance of some of Bohol, Laguindingan, Puerto Princesa, Davao, Bacolod and Iloilo airport projects would commence next year. This will also include construction and rehabilitation of the current aviation hubs as well.
One of the biggest project among these 16 projects is $180 million San Fernando Airport project, which includes the construction of an airport terminal with a mall complex in Barangay Poro, San Fernando City.
The construction and the modernization of the Davao Sasa port, (an international-standard container port with modrn facilities) project worth $388 million is under transport agency is also about to take off and will ultimately benefit the import and export industry of the country, more specifically the island of Mindanao.
The projects like $428.89-million Motor Vehicle Inspection System; the $3.70-billion North-South Railway Project-South Line; the $3-billion Mass Transit System Loop; the Manila Bay-Pasig River-Laguna Lake Ferry System; and the Light Rail Transit Line 1 DasmariĂ±as Extension. Are under the secretary of Transportation.
Other PPP deals P1.12-billion Regional Prison Facilities; the $416-million Metropolitan the New Centennial Water Supply Project, the Batangas-Manila (BatMan) Natural Gas Pipeline Project (approximately 110-kilometers natural-gas transmission and distribution).
The government has awarded eight PPP contracts since the flagship infrastructure program was launched in late 2010 and 15 more contracts are to be awarded till 2016.
Business Mirror, 13 October 2014
By Cai U. Ordinario
The Asian Development Bank (ADB) has extended $500,000 in technical assistance grant to the Philippines to improve the staff capacity of the Bureau of the Treasury (BTr) in securities dealing, processing, as well as in asset management.
The ADB grant will help finance the project titled Strengthening Treasury Operations and Capital Market Reform which will hire a consultant to conduct the training of the BTr staff.
In a document updated by the ADB last week, the consultant will work with the BTr staff for 22 working days starting January 2015. Funding was approved by the ADB Board in September 2014.
â€śThe expert will work with BTrâ€™s government debt resident adviser and assist BTr in implementing its updated organization structure as well as launching BTrâ€™s newly developed investment and risk management functions. The expert will, likewise, strengthen BTrâ€™s dealers by increasing their technical capacity through on-the-job training,â€ť the ADB document stated.
The project was green lighted by the ADB Board in September and was the fourth project approved for funding by the Manila-based multilateral development bank for the Philippines this year.
The other three projects approved this year involved another $500,000 grant for the project Teach for the Philippines; the $250-million worth loan for the Local Government Finance and Fiscal Decentralization Reform Program-Subprogram 1; and a $2-million grant for the Strengthening Evaluation and Fiscal Cost Management of public-private partnerships (PPPs).
The funding for Teach for the Philippines was approved in August 2014; the Local Government project in February 2014; and the grant for Strengthening Evaluation and Fiscal Cost Management of PPPs in May 2014.
The Teach for Philippines project aims to improve the countryâ€™s progress in meeting the education-related Millennium Development Goals. The project will focus on regional and income-based inequalities.
The ADBâ€™s participation in the Local Government Finance project is through a loan that was approved in February this year, while the bank is extending a technical assistance to the Strengthening Evaluation and Fiscal Cost Management of PPPs project approved in May.
The Strengthening Evaluation and Fiscal Cost Management of PPPs project aims to improve the financial sustainability infrastructure investments made through PPPs by strengthening the National Economic and Development Authorityâ€™s capacity to appraise PPP projects.
Apart from the four approved projects, the Philippine government still has six more projects proposed for funding by the ADB. Five of these projects are loans and only one is a technical assistance or grant project.
The loan projects include the Urban Water Supply and Sanitation Project, where ADB was asked to finance a $70,000 loan; the Solid Waste Management Sector Project, $70,000; and the Water District Development Sector Project, $60,000.
The loan projects also include the Angat Water Transmission Improvement Project, where ADB is proposed to finance $115,500 and the Senior High School Support Program, $300,000.
The lone proposed technical assistance project involves the PFM 3, or the project previously known as the Governance and Public Financial Management Phase I where ADBâ€™s contribution is still undetermined as of October 2014.
Philippine Inquirer, 11 October 2014
By Ben O. de Vera
Philippine economic managers have urged Japanese investors to pour money into the countryâ€™s infrastructure in order to sustain the growing economy.
â€śThe [Philippine] government is working to step up investments in infrastructure to be at par with other competing economies and to meet the countryâ€™s future growth requirements,â€ť Socioeconomic Planning Secretary Arsenio M. Balisacan said during the Philippine Economic Briefing in Tokyo on Wednesday.
The Aquino administration aims to jack up infrastructure spending to at least 5 percent of the gross domestic product (GDP) by 2016, from a mere 2.2-percent share in 2012.
In a statement Friday, the Investor Relations Office reported that Philippine officials encouraged the more than 400 Japanese businessmen and government representatives at the Tokyo road show to look into the opportunities being presented by the public-private partnership (PPP) infrastructure projects to be rolled out within a yearâ€™s time, on top of prospects in the capital markets, tourism and power sectors.
The PPP projects are worth $12.28 billion.
To improve the countryâ€™s infrastructure, 16 PPP projects will be rolled out in the next 12 months. The projects include the operation and maintenance of the airports in Bacolod (worth $450.2 million), Davao ($901.6 million), Iloilo ($675.6 million), Panglao in Bohol ($52 million), Puerto Princesa City ($116.2 million), and Laguindingan ($353.8 million), according to PPP Center Executive Director Cosette V. Canilao.
The Japanese investors were also urged to study the $3.927-billion south line of the North-South Commuter Railway, the $3-billion Mass Transit System Loop, the $1.115-billion Regional Prison Facilities, the $464-million San Fernando Airport, the $428.9-million Motor Vehicle Inspection System, the $416-million New Centennial Water Supply Source project, the $377.8-million Davao Sasa Port, as well as the Batangas-Manila Natural Gas Pipeline, the Light Rail Transit Line 1 DasmariĂ±as Extension and the Manila Bay-Pasig River-Laguna Lake Ferry System projects.
About 17 percent of the countryâ€™s 32,000-kilometer national road network also remains unpaved. This is where Japanese firms may partner with the Philippine government in the areas of construction, consultancy as well as technical support services, Public Works and Highways Secretary Rogelio L. Singson noted.
InterAksyon, 10 October 2014
By Darwin G. Amojelar
MANILA – Philippine economic managers have offered to Japanese investors a string of public-private partnership (PPP) projects that the Aquino administration will roll out next year.
“There are 16 projects that we are planning to roll out by next year,” said PPP Center executive director Cosette V. Canilao, who has joined a Philippine delegation in a roadshow in Japan.
One of the 16 projects is the Metropolitan Waterworks and Sewerage Systemâ€™s (MWSS) P18.72 billion New Centennial Water Supply Project.
A Japanese conglomerate, Marubeni Corp, is already participating in the Philippine water sector, after taking a stake in Maynilad Water Services Inc, the private concessionaire for the east zone of MWSS.
â€śThe New Centennial Water Supply Project will ensure water security for the residents of Metro Manila,” Canilao said.
MWSS has begun soliciting bids for the project, the deadline for which falls on November 17.
Also offered to the Japanese business community are the operations and maintenance (O&M) contracts of several airports in Bohol, Laguindingan, Puerto Princesa, Davao, Bacolod and Iloilo.
â€śThese airport projects have an estimated cost of around $2,549.33 million in total and they are also included in our list of possible investment opportunitiesâ€ť, Canilao said.
The Philippine delegation also pitched the San Fernando Airport Project, which involves construction of an airport terminal with a mall complex in Barangay Poro, San Fernando City in La Union. The project has a $180 million budget.
The $388-million construction and modernization of the Davao Sasa port is also one of the PPP projects that was showcased in the forum.
â€śThis project will ultimately benefit the import and export industry of the country, specifically the island of Mindanao through transforming its facilities into a modern, international-standard container portâ€ť, Canilao said.
Other PPP projects that were presented in Tokyo are as follows:
$1.115.11-billion Regional Prison Facilities project;
$428.89-million Motor Vehicle Inspection System;
$3.702 billion North-South Railway Project-South Line;
$3-billion Mass Transit System Loop;
Manila Bay-Pasig River â€“ Laguna Lake Ferry System; and
LRT1 Dasmarinas Extension, which will extend the train service by approximately 15 kilometers.
Canilao said the government also is pursuing the Batangas-Manila (BatMan) Natural Gas Pipeline project, which involves construction of an approximately 110-kilometer natural gas transmission and distribution pipeline from the province of Batangas to transport and supply natural gas to Batangas, Laguna, Cavite and Metro Manila.
“The government assured the Japanese companies that significant reforms in the implementation of the countryâ€™s PPP program have already been put in place. And the Philippines has been consistent in rolling out PPP projects through transparent, credible and accountable processes,” Canilao said.
Business Mirror, 10 October 2014
By David Cagahastian
The governmentâ€™s economic officials invited Japanese businessmen to invest in over $12.28 billion worth of public-private partnership (PPP) infrastructure projects to be rolled out within the next 12 months.
In the economic road show hosted by the Philippines in Tokyo on Wednesday, the government invited Japanese fund managers and investors to tap the Philippinesâ€™s comparative advantages as an investment destination.
â€śThe Philippines is looking north to Japan, and hopes that Japan will look south to the Philippines,â€ť Finance Secretary Cesar V. Purisima said in his statement to open the road show at the Shangri-La Hotel in Tokyo.
â€śThe Japanese and Filipino economies are heavily complementary. Japan has an abundance of investible capital and manufacturing prowess, while the Philippines has a young and talented labor force,â€ť he said.
Aside from the Philippinesâ€™s work force, Purisima said the countryâ€™s large population provides a huge market for Japanese investments. He said the strategic geographical location of the Philippines and its role in the Asean Economic Community also makes the Philippines an attractive investment destination.
Socioeconomic Planning Secretary Arsenio M. Balisacan said investing in the Philippines would be a prudent move because of its favorable economic prospects. The National Economic and Development Authority expects gross domestic product to grow by at least 6.5 percent this year, between 7 percent and 8 percent next year, and between 7.5 and 8.5 percent in 2016.
PPP Center Executive Director Cosette Canilao said the $12.28 billion worth of PPP deals consist of 13 infrastructure projects to be rolled out within the year. There would be three more PPP projects to be rolled out within the short term, but the costs of these deals have yet to be determined.
The PPP projects are the following: New Centennial Water Supply Source ($416 million); Enhanced Operation and Maintenance of Panglao Airport in Bohol ($52 million); O&M of Laguindingan Airport ($353.8 million); O&M of Puerto Princesa Airport ($116.2 million); O&M of Davao Airport ($901.6 million); O&M of Bacolod Airport ($450.2 million); O&M of Iloilo Airport ($675.6 million); Davao Sasa Port ($377.8 million); Regional Prison Facilities ($1.115 billion); Motor Vehicle Inspection System ($428.9 million); North-South Railway Project-South Line ($3.927 billion); Mass Transit System Loop ($3 billion); San Fernando Airport ($464 million). Energy Undersecretary Raul Aguilos also presented investment opportunities in the Philippinesâ€™s indigenous energy resources, such as hydroelectric and natural oil and gas development.
He said the Department of Energy aims to nearly triple the countryâ€™s installed renewable-energy capacity from the current 5,438 MW to 15,304.30 MW by 2030.
On oil and natural gas, he said there are 16 sedimentary basins all over the Philippines with combined potential of 4,777 million barrels of fuel oil equivalent of oil and gas reserves. Moreover, he said, there are 13 coal basins in the country with a total resource potential of 2.4 billion metric tons.
Tourism Secretary Ramon R. Jimenez Jr. also promoted the tourism industry, saying the increasing tourist arrivals in the country will result in a room gap in hotels by about 50,000 by 2016.
On the regulation side of business, Internal Revenue Deputy Commissioner Nelson Aspe and Securities and Exchange Commission Chairman Teresita Herbosa talked about tax-related matters and securities registration in the Philippines, respectively, to assure the governmentâ€™s support to make it easier for foreigners to invest in the Philippines.
BSP Assistant Governor Johnny Noe E. Ravalo presented the favorable inflation and banking-sector outlook for the Philippines for the medium term. He cited growing resources of the Philippine banking sector that will help fund the economyâ€™s investment requirements.
The law liberalizing entry of foreign banks, which was passed earlier this year, is expected to further boost the ability of the countryâ€™s banking sector to service the growing credit requirements as economic activities rise. Purisima said more foreign banks in the country should also bode well for attracting foreign direct investments because they can serve as good channels of information about the Philippine economy.
The latest road show was organized with assistance from Japanese banks, including Bank of Tokyo Mitsubishi, Daiwa Securities Group Inc., Mitsubishi UFJ Morgan Securities Co. Ltd., Mizuho Bank Ltd., Mizuho Securities, Nomura Holdings Inc., SMBC Nikko Securities Inc. and Sumitomo Mitsui Banking Corp.
The following Japanese government agencies, likewise, helped organize the event: Ministry of Finance, Japan Bank for International Cooperation, Japan International Cooperation Agency and Japan External Trade Organization.
The Philippine Star, 10 October 2014
By Ted P. Torres
MANILA, Philippines – Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) director general Arsenio M. Balisacan is pitching Philippine infrastructure and power projects, particularly those under Public-Private Partnership (PPP) program, to investors in Japan.
In an economic briefing on Philippine infrastructure and investment plans in Tokyo, Balisacan told Japanese investors that there are hundreds of infrastructure-related projects worth billions of dollars in need of private investors.
For 2013-2016, the priority programs and projects for the infrastructure sector consist of 952 projects with total investment requirements amounting to about $46.69 billion, including capital infrastructure projects, both ongoing and proposed.
â€śInvestment requirements for infrastructure development remain huge despite increased public infrastructure spending. Therefore, this will be supplemented by private sector investments through PPPs,â€ť said Balisacan.
He told Japanese investors that the Philippine government is reviewing and outlining policies and legal framework involving private sector participation to make it easier to start and maintain business.
These include the build-operate-transfer (BOT) law and the joint venture (JV) guidelines. Likewise, reforms in the energy sector, particularly the approval of the feed-in-tariff (FiT) rates, also aim to increase private sector participation by encouraging investments in renewable energy (RE) projects.
The Updated Philippine Development Plan identified six key sectors that generate high quality employment for Filipinos and huge private sector investment. These are manufacturing, agribusiness, tourism, information technology-business process management, logistics, and construction.
Balisacan also told investors that the Philippine government targets gross domestic product (GDP) to grow 6.5 to 7.5 percent in 2014. It grew 7.2 percent in 2013.
For 2015, the growth rate is targeted at seven to eight percent, and 7.5 to 8.5 percent in 2016.
The industry sector is projected to grow the fastest, while the services sector is expected to remain robust during the period.
â€śGiven all these, the government is working to step up investments in infrastructure to be at par with other competing economies and to meet the countryâ€™s future growth requirements,â€ť the chief economic planner said.
ABS-CBN News, 10 October 2014
MANILA â€“ The Philippine government showcased infrastructure projects with an estimated worth of P550 billion ($12.28 billion) to Japanese investors in Tokyo.
Thirteen infrastructure projects are being targeted by government to be rolled out in the next 12 months under the public-private partnership (PPP) program.
These projects include the New Centennial Water Supply Source ($416 million); Enhanced Operation & Maintenance (O&M) of Panglao Airport in Bohol ($52 million); O&M of Laguindingan Airport ($353.8 million); O&M of Puerto Princesa Airport ($116.2 million); O&M of Davao Airport ($901.6 million); O&M of Bacolod Airport ($450.2 million); O&M of Ilo-Ilo Airport ($675.6 million);
Davao Sasa Port ($377.8 million); Regional Prison Facilities ($1.115 billion); Motor Vehicle Inspection System ($428.9 million); North-South Railway Project â€“ South Line ($3.927 billion); Mass Transit System Loop ($3 billion); San Fernando Airport ($464 million);
Three more PPP projects–Manila Bay-Pasig River-Laguna Lake Ferry System; Batangas-Manila Natural Gas Pipeline; and LRT Line 1 DasmariĂ±as Extension–are also expected to be rolled out within the short term.
â€śThe Philippines is looking north to Japan, and hopes that Japan will look south to the Philippines,â€ť Finance Sec. Cesar Purisima said in a statement.
â€śThe Japanese and Filipino economies are heavily complementary; Japan has an abundance of investible capital and manufacturing prowess while the Philippines has a young and talented labor force,â€ť he added.
The government also presented to Japanese investors energy-exploration opportunities, income potentials in tourism, and financial instruments offered by the Philippine Stock Exchange.
The roadshow, which was held at the Shangri-La Hotel in Tokyo, was attended by over 400 Japanese fund managers, investors, and government representatives.
The Philippine delegation was composed of top economic officials, including Purisima, Socioeconomic Planning Secretary Arsenio Balisacan, PPP Center Executive Director Cosette Canilao, Public Works and Highways Secretary Rogelio Singson, Tourism Secretary Ramon Jimenez Jr., BSP Assistant Governor Johnny Noe Ravalo, and Energy Undersecretary Raul Aguilos.
Rappler, 01 October 2014
By Lala Rimando
It’s a testament to how much these Philippine firms have grown and matured. They’re now looking for yield and more portfolio expansion opportunities.
MANILA, Philippines – Metro Pacific. Ayala. San Miguel. Megawide. Fil-Invest. DMCI. Lopez and Ty groups. These business groups associated with the Philippines’ richest families are a staple whenever road, rail, airport and other infrastructure projects are up for privatization via the public-private partnership (PPP) scheme.
It’s a testament to how much they have grown and matured. They’re now looking for yield and more portfolio expansion opportunities. It used to be that the Philippine “playground” required the deep pockets and technological muscle of foreigners, especially when it came to multibillion-dollar projects, like infrastructure and power. Some were burned and spurned.
The situation today indicates that these Filipino families have the stomach for the projects’ risks. With how things are going in the roll out of PPP projects under the Aquino government, we’ll likely see more of the same. (READ:Â Gov’t raises infrastructure spending)
â€śMoney is not an issueâ€ť in big-ticket projects in the Philippines, Suraj Moraje, who manages McKinsey’s Manila office, told the audience at the Philippine Economic Briefing on Tuesday, September 30.
â€śLocal institutions have very good balance sheets,â€ť and therefore, can afford to finance infrastructure projects, which are inherently risky but potentially profitable. Moraje noted: â€śThe international community has not even started getting involved.â€ť Itâ€™s a hint that we are missing out on mega-billion long-term foreign funds that have made their way into emerging markets, including those in Asia. These are the same funds generally touted as a “vote of confidence,” thus state officials actively pursue them.
Sun Life Asia Investments managing director Michael Manuel echoed the same sentiment. â€śAt this time when interest rates are very low, we are looking at higher yields. PPP in infrastructure and power is a natural choice for us. We [are willing] to trade liquidity for more yield.â€ť Infrastructure projects under the PPP scheme involve long term commitment since funds and other resources are tied in it for years, even decades.
Manuel cited one of the Philippinesâ€™ golden tickets: an investment grade from the credit rating agencies. â€śThe opportunities in the Philippines are something weâ€™re looking at. The investment grade [rating of the country] means we have to include the Philippines in our [PPP investment] portfolio.â€ť
Time running out
That localsâ€™ pockets are deep and foreign investors are waiting in the wings are a recurring refrain.
Weâ€™ve heard this in other previous economic briefings, as well as other gatherings here and abroad. A handful of toll road, rail and airport projects planned and promised by the current officials way back in 2010 have made it through the PPP contracting mill, but a long list of crucial assets meant to ensure that the Philippine economy sustains its attractive growth rate have yet to get off the ground.
With just months to go before the Aquino administration turns over the reins of the government to its successor, Socioeconomic Planning Secretary Arsenio Balisacan said there are still about 950 infrastructure projects in the pipeline.
While more taxpayersâ€™ money will be spent on infrastructure â€” from 2.2% of GDP in 2012 to at least 5% by 2016 â€” â€śthe private sector is expected to participateâ€ť in these projects worth about US$46.7 billion, Balisacan told the audience at the Philippine International Convention Center.
Time is running out, admitted Cabinet Secretary Rene Almendras, who stressed: â€śItâ€™s now all about execution. Weâ€™re passed the planning stage. All agencies have roadmap to 2016.â€ť
Yet, the gap between these must-doâ€™s and what-is-happening remains wide. The Aquino government has previously explained they wanted to rid the system of corruption and wrongdoing, resulting in the delays in packaging and bidding of projects.
There are reasons beyond their control, including the Constitutionâ€™s foreign ownership limit at only 40%. Investors committing billions-worth of resources at such lengthy period would naturally want more control over or influence in the project. This limitation was brought up again by investors during the Filipino officialsâ€™ recent trip and meetings in Europe, according to Transportation Secretary Emilio â€śJunâ€ť Abaya. â€śClearly, it is an issue we need to address if we want more investments in infrastructure,â€ť he said, though also noting difficulties in changing the Charter now that 2016 is near.
Public Works Secretary Rogelio Singson also talked about right-of-way issues, which delay road and other projects. Government takes on the responsibility of buying the proposed site and relocating and compensating the affected residents, before passing it to the private firm. Heâ€™s up against the legislative mill, which also needs time, an elusive luxury. â€śWe have been pushing for the changing of the provisions on the BOT (Build-Operate-Transfer) Law to make it easier to have right-of-way.â€ť
Risky and costly
There are, however, bottlenecks and issues that are of the governmentâ€™s own doing.
A classic case is how the economic managers handled the much-needed tollroad meant to connect the main north and south Luzon expressways (NLEx and SLEx), and designed to ease road congestion leading into and out of the crucial Manila port.
TheÂ P18-billion toll roadÂ was further delayed for another year after the justice department ruled that the public works and transportation agency officialsâ€™ decision on how to move the project forward was illegal. Wanting to expedite the process, the team of Transportation Secretary Abaya pushed for a joint venture deal between local infrastructure giant Metro Pacific Investment Corporation (MPIC) and the state-run Philippine National Construction Corp. (PNCC), a move that the National Economic and Development Authority (NEDA) Board, led by President Benigno Aquino III, endorsed.
Justice Secretary Leila de Lima said Singsonâ€™s public works department should just proceed with the projectâ€™s original design and conduct a Swiss challenge to the unsolicited proposal of MPIC, instead of evading it via a joint venture scheme. Under the process, MPIC would have the right to match the highest bid, an option Aquino was not comfortable with. This NLEx-SLEx connector project was originally submitted to the DPWH in May 2010, and would have been finished by 2016.
These and other issues in the design and permitting process are what turn off foreign investors, noted Moraje of McKinsey. The risk-return profile of the Philippines remains a concern and often compared to other peer countries, like Indonesia and Malaysia, he noted, citing a World Bank study.
Another issue that keeps the Philippinesâ€™ risk profile uncompetitive is the ability of the government to be consistent with the application of laws and processes. Transportation Secretary Abaya said the Cabinet officials are fully aware of this stigma and that â€śconsistency of policy is on the top consciousness of the economic development cluster.â€ť
â€śWe cannot turn a blind eye on previous contracts. In DOTC, we are in arbitration proceedings with regards to two major projects,â€ť he said. He was referring to the cases filed by German firm Fraport against the Philippine government in a Washington court for its investments in the scandal-ridden Ninoy Aquino International Airport Terminal 3 (NAIA-3), as well as by the Filipino consortium involved in the rail project, MRT-3. The latterâ€™s case is ongoing in a Singapore court.
These two cases have been often cited as reasons why transportation officials are careful and deliberate â€” thus, slow â€” in processing much-needed rail and airport projects.
That puts us, the consumers and taxpayers, at the losing end. Risks are costly, and unfortunately, weâ€™ll have to bear that burden through higher fares or fees just to have access to the infrastructure we deserve.- Rappler.com
Lala Rimando was former business editor of Rappler. She specializes in stories on political economy, boardroom dramas, infrastructure and energy issues, and corporate governance. She is currently doing strategic consulting for multilateral agencies and foreign groups keen on investing in the Philippines.