Philippine Star, October 16, 2011
MANILA, Philippines – There is no need to appoint a Public-Private Partnership program “czar” as existing structures are enough to support the program and keep projects on track, Malacañang said yesterday.
Deputy presidential spokesperson Abigail Valte said over radio dzRB that the recently established PPP Center, headed by an executive director, is competent enough to handle all matters related to PPP projects.
She was reacting to calls from San Miguel Corp. vice president Lorenzo Formoso III for the designation of a PPP czar to serve as government point person for infrastructure development.
“I think in this particular instance… I am quite certain that it was taken into consideration (the need for someone to specifically oversee PPP projects) and the product was the executive director,” Valte said.
Malacañang recently named Cosette Canilao as PPP executive director.
Valte said the PPP Center was a product of comprehensive discussions and debates to ensure it would be responsive to its task of handling the administration’s flagship projects.
Earlier, Formoso said investors always need assurance against sudden policy shifts that might undermine the financial viability of state-solicited projects undertaken by private players.
Formoso said the administration needs a single point person, preferably with Cabinet rank, who will form consistent rules in the implementation of priority infrastructure projects.
He said this would facilitate spending for the country’s infrastructure sector to allow the Philippines to catch up with its neighbors in the region.
PPP refers to the government’s funding scheme for big-ticket projects unveiled last year by President Aquino himself. The government has since switched preference to official development assistance (ODA) loans from foreign donors to fund projects, although the list of projects has not changed.
Formoso noted that many big-ticket projects in the past had suffered from changes in rules in the “middle of the game.” Regulators also have a tendency to buckle to public pressure against any increase in fees.
Having a single infrastructure point man, he said, would “reduce the lag time from conceptualization to implementation.”
Private companies also have their own roles to play. Instead of just taking the cue from government plans, Formoso said private firms need to actively work with policymakers to formulate development strategies.
In a forum with the Foreign Correspondents’ Association of the Philippines last Wednesday, President Aquino admitted the PPP program was undergoing review because of wrong assumptions that needed to be corrected.
But the President said it would not be accurate to conclude that the PPP program as a whole was no longer up and running.
“We are reviewing the whole process and we’re trying to compress the time element involved. But, at the same time, there has been a rethinking – would it be more prudent for us to embark as originally announced with the wrong assumption? What were the wrong assumptions? That we would not have access to other funds that can give us a hybrid PPP program instead of a purely PPP program,” Aquino said.
“The biggest assumption was there would be practically nothing in the budget that could be utilized for these needed infrastructure projects. However, we managed to (have) quite a bit of savings. There is a significant reduction in our deficit. There is… global peso bonds that (have) given us the fiscal space to suddenly say: ‘look, we can modify the partnership but it doesn’t need to be the pure PPP form but perhaps a two-step process wherein government can access concessional loans that will bring down the cost of the project dramatically and therefore reduce the burden of the people,’” he said.
“So we are hoping that we get the needed infrastructure at the cheapest price possible… and hence the necessity for all of the reviews,” Aquino said.
But the President said four PPP projects would be bid out this year and the first awarding would take place in January.
Aquino also said the government is set to release more than P72 billion in a stimulus package to pump-prime the economy and help the poor weather the global economic slowdown.
Presidential spokesman Edwin Lacierda, meanwhile, said Canilao’s expertise in banking qualifies her for the job as PPP executive director.
He cited in particular Canilao’s more than 20 years of experience in financial management in the private sector.
She had worked in the private sector in the field of advisory, investment banking and corporate banking. She recently joined government service, initially as consultant to the National Economic and Development Authority for the PPP Center of the Philippines, Lacierda said.
Prior to her appointment as head of the PPP Center, Canilao was its deputy executive director.
Canilao had served as director of Standard Chartered Bank where she had established and headed its distressed debt servicing business in the country. She was also a partner of PricewaterhouseCoopers where she headed the Crisis Management Practice and Financial Services Industry.
“Her (Canilao) broad experience in advisory capacity includes corporate finance, mergers and acquisitions, private equity transactions, divestitures, debt restructuring, compliance review and transactions services,” Lacierda said.
Canilao started her career in program lending and corporate banking. She holds a Masters in Finance degree from the University of the Philippines. She had also attended numerous trainings in the course of her career, including a corporate restructuring program at Harvard Business School.
Lacierda also said the Philippines was not showing bias against any foreign government wanting to invest in the country, despite its having cancelled or held off some projects approved during the previous administration due to some disadvantageous provisions.
The four PPP projects on track are the Daang Hari-South Luzon Expressway Road Project and the vaccination program of the Department of Health, the 10,000 school buildings and the North Luzon Expressway-SLEX connector.
Aquino said Tuesday that the government would tap the PPP program to build 66,000 new classrooms by the end of his term in 2016.
During the President’s official working visit to Japan, Finance Secretary Cesar Purisima told Japanese businessmen that the government would continue to consider both solicited and unsolicited projects for PPP.
