25 September 2012, Rappler.com
by Katherine Visconti
MANILA, Philippines – The country’s largest commercial banks are seeking to pool funds for a US$1 billion credit facility for big-ticket infrastructure projects under the Aquino government.
At a gathering of bankers, investors, government officials and other stakeholders in Makati on Tuesday, September 25, top officials of various financial institutions currently awash with cash said they are keen to participate in financing the infrastructure projects under the public-private partnership (PPP) scheme of the government.
This target amount for the pooled funds is unprecedented among the local finance and investment groups, which had traditionally shied away from long-term projects that involved the government.
“There’s no shortage of credit facilities. If we were to work together with the local banks, I think we can put about $1 billion,” Teresita Sy-Coson, chairperson of Banco de Oro which is sponsoring the gathering, told Rappler.
“This is how much confidence we have in the PPP,” she stressed, adding that “There’s a lot of liquidity in the market right now.
The local banking system has been very liquid following regulatory efforts by the Bangko Sentral ng Pilipinas to beef up capital base after the real estate-related financial shocks during the Asian financial crisis in the 1990’s.
Most of the financial system’s excess funds have made their way to real estate, the stock market, and particularly in investment windows the BSP has made available in previous years to absorb liquidity and reduce inflation risks.
Sy-Coson said only the individual creditor’s single borrower’s limit (SBL), which is computed as a percentage of the group’s risk-rated capital, is the bank’s concern.
When asked how much BDO will put up in the pooled credit facility, Sy-Coson replied, “It depends upon our SBL and how we discuss with the other banks. It’s a matter of working together.”
“We cannot say we want a certain percentage at this time, it’s a matter of negotiations and working together,” she added.
Representatives of other banking groups are present at the Makati event, including Ty-led Metropolitan Banking Corp (Metrobank), Ayala-led Bank of the Philippine Islands (BPI), Yuchengco-led Rizal Commercial Banking Corp (RCBC), Security Bank, and another Sy-led one, China Bank.
“We’re interested to work with all of them,” Sy-Coson said.
When asked which particular PPP projects they are eyeing, Sy-Coson replied, “We’re not selective. As long as the proponent is good, the project is good, we’ll go into it.”
The Sy, Ayala, and Aboitiz groups, which all have banking units in their conglomerates, have previously announced they are keen on funding PPP projects.
The Aquino government launched the PPP scheme in 2010 as its flagship program for infrastructure projects meant to stimulate growth in the local economy. Better roads, airports and railways will enable Filipinos to be more productive and building them will pump money into the construction sector.
So far, only one of the PPP projects in the line-up has been successfully auctioned off — the Daang Hari-SLEx extension road project — which has yet to start construction in 2013.
Finance Secretary Cesar Purisima has said in an economic briefing on September 17 that 8 projects will be “rolled out” this 2012. The bidding for biggest one– the P60 billion-worth LRT-1 Cavite Extension project — will likely happen only in the second quarter of 2013.
This follows delays that have shaved off some points from the economy’s growth rates in the past quarters.
And Sy-Coson explained that the sooner the projects are bided out, the better for bankers, like her. – Rappler.com
